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SYSTEMATIZING  ''''''''    '' 

The 
OIL  BUSINESS 


COPYRIGHT  APPLIED  FOR 


By  G.  H.  BESSIRE 

P.  O.  Box  73 

Wichita  Falls,  Texas 


INDEX  (P^i3H^ 


Introductory    3 

•Ji\';''     Stock  Companies  Incorporated  and  Others 3 

The  Oil  Business  in  General 5 

.'  '".\.  The   Opening   Entry 5 

Names  of  Accounts 5 

N.   li 7 

Expense  Accounts  8 

Examples  for  Journal  Entries  on  the  Following  Accounts 8 

The  Purchase  Requisition  9 

Leases  9 

Lease  Development  (Drilling  Wells) 10 

Warehouse    12 

Taxes    12 

Repairs  and  Replacements  13 

Filing  13 

Lease  Rental  Payment  „ 14 

Checks ; 14 

Closing  Your  Books  15 

Audits    15 

Income  Tax  Report  15 

Other  Losses  Which  Are  Allowed 16 

Information  for  Your  Executive  Officer 16 

Balance  Sheet  as  of  July  31,  1922 16 

Details  of  Balance  Sheet  Items  as  of  July  31,  1922 17 

Operating  Profit  and  Loss  Statement  for  Month  of  July,  1922 18 

Accounts  Payable  (subject  to  a  discount) 18 

Accounts  Payable  (Current) 18 

Lease  Rentals  Payable  for  Quarter  Ending  March  31st,  1922 19 

Hopkins  Well  No.  1 — Production  Report,  Prairie  Oil  &  Gas  Company 19 

Phillips  Well  No.  5 — Casinghead  Gas  Production — Indian  Gasoline  Corporation 19 

Davis  Well  No.  3 — Gas  Production — The  Texas  Company 19 

Rental  Receipt  _ 19 

Employees'   Schedule  _ 20 

Daily  Bank  Balance  _...  20 

Deposit  Slip  Record  20 

Trade  Magazines  20 

Automobile   Expense   20 

Purchasing   Department    20 

Furniture  and  Fixtures 21 

Stationery  and  Printing 21 

Drilling  Equipment  and  Oil  Well  Supplies 21 

Forms 23-32 


INTRODUCTORY 

In  putting  this  System  on  the  market  by  mten- 
tions  are  to  benefit  the  oil  business  as  a  whole,  and 
especially  the  beginners  such  as  I  was  when  I  entered 
the  business  several  years  ago  with  a  number  ot  years 
accounting  experience  in  different  mercantile  Imes. 
You  will  find,  as  I  did,  that  the  oil  business  is  different 
from  any  other  line  of  business.  In  fact,  it  is  a  busi- 
ness all  to  itself.  In  saying  this  I  am  speaking  from  a 
number  of  years  experience  in  the  accounting  and  ex- 
ecutive branches.  While  this  System  is  intended  to 
cover  the  accounting  department  of  the  oil  business,  i 
will  not  undertake  to  outline  any  one  system  of  twoks 
to  cover  the  oil  business  in  general.  While  a  lot  ot  the 
problems  are  the  same,  each  company  has  problems  all 
its  own.  If  I  were  called  upon  to  install  a  system  ot 
books,  I  would  go  into  the  business  in  detail  with  the 
executives  of  the  company,  get  the  aims  and  aspira- 
tions of  the  men  who  are  building  the  organization,  and 
then  I  would  install  a  system  to  meet  their  individual 
needs— one  that  would  not  only  take  care  of  the  pres- 
ent requirements,  but  also  their  future  expansion. 

As  there  are  more  stock  companies  engaged  in  the 
oil  business  than  others,  I  will  begin  my  work  by  tak- 
ing up  the  needs  of  these  companies  as  a  whole,  and 
will  continue  their  further  needs  under  the  heading  ot 
Oil  Companies  In  General. 

STOCK  COMPANIES  INCORPORATED 
AND  OTHERS 

Have  your  charter,  articles  of  association  or 
trust  agreement  made  out  and  properly  filed.  The  next 
book  you  will  need  will  be  a  book  of  records  for  the 
minutes.  I  suggest  for  this  purpose  a  loose  leaf  binder, 
as  with  this  form  of  records  you  can  keep  a  typewrit- 
ten record,  where  otherwise  you  would  have  to  make  a 
pen  and  ink  record.  For  this  purpose  I  suggest  an 
I  P.  loose  leaf  Duratlex  Binder  No.  2714.  This  may  be 
filled  with  I.  P.  loose  leaf  pages,  sizes  8I/2XII  inches. 
These  articles  are  put  out  by  the  Irving-Pitt.  Mfg.  Co., 
Kansas  City,  Mo.,  and  are  sold  by  most  stationery  sup- 
ply houses  and  book  stores.  This  has  a  ring  binder  and 
the  pages  can  be  removed  at  will.  When  it  is  used  as 
a  minute  book  I  suggest  that  the  pages  be  numbered 
to  avoid  duplication.  However,  if  a  real  minute  book 
is  desired,  one  that  was  built  for  that  purpose  alone, 
and  one  in  which  the  pages  are  numbered  at  the  fac- 
tory and  sold  in  sets  which  cannot  be  duplicated  out- 
side of  the  factory,  and  which  assures  you  a  record 
book  which  would  be  hard  to  tamper  with  without  de- 
tection, call  for  a  McMillam  Minute  Book,  which  comes 
in  sizes  from  200  pages  up. 

Make  this  minute  book  a  complete  history  of  all 
of  the  meetings  of  your  board  of  directors,  trustees 
and  stockholders,  keeping  dates  and  names  of  all  mem- 
bers present,  also  stating  if  there  was  a  quorum  pres- 
ent, or  otherwise.  Keep  an  exact  record  of  all  resolu- 
tions passed  at  these  meetings,  also  any  other  informa- 
tion which  should  be  of  record.  Where  shareholders 
are  not  present  a  record  should  be  kept  of  all  proxies 
voting,  and  the  original  signed  proxies  should  be  filed 
away  in  a  folder  used  for  this  purpose.  At  the  close  of 
a  meeting  the  minutes  of  same  should  be  signed  by  the 
President  and  Secretary  of  the  company. 

Next  in  order  will  be  your  stock  certificate  book. 
This  book  will  contain  certificates  or  shares  of  your 


company's  stock,  and  should  be  numbered  consecutive- 
ly starting  with  number  one.  The  stub  and  certificate 
should  both  be  numbered.  Each  original  certificate 
sold  requires  a  revenue  stamp  of  five  cents  on  each 
share  up  to  the  value  of  $100.00,  or  in  other  words  on 
each  sharei'.  of  a  hundred  dollars  or  less ;  same  to  be  af- 
fixed to  the  stub  of  the  certificate  sold,  so  that  it  may 
be  readily  examined  by  a  revenue  officer  who  is  likely 
to  visit  you  at  any  time.  This  stamp  should  be  can- 
celled to  show  the  date  when  cancellation  of  same 
was  made.  When  original  shares  are  returned  to  you 
to  be  transferred  to  another  party,  properly  cancel 
same  so  that  there  will  be  no  possible  chance  of  them 
being  used  again.  It  should  then  be  pasted  onto  the 
original  stub  bearing  the  same  number,  and  a  new  cer- 
tificate should  be  issued  to  the  party  to  whom  it  has 
been  transferred.  Change  the  original  owner  of  this 
stock  in  your  Stockholders'  Ledger,  and  credit  in  the 
same  book  the  party  to  whom  the  stock  has  been  trans- 
ferred. Stock  transfer  only  requires  a  two-cent  revenue 
stamp. 

Certificate  books  can  be  made  up  by  your  printer, 
and  in  this  way  you  will  be  able  to  select  a  design  suit- 
able for  your  business. 

The  next  book  on  your  program  will  be  your  Stock- 
holders' Ledger.  This  book  will  be  used  to  keep  the 
names  of  your  stockholders,  the  number  of  shares  they 
own  and  the  price  they  paid  for  same,  as  shown  by  the 
stub  in  your  stock  certificate  book.  This  Ledger  should 
be  kept  as  any  other  ledger.  Credit  the  shareholder 
with  each  certificate  purchased  by  him,  or  her,  and 
debit  them  with  any  transfer  of  stock  which  they 
should  make,  thereby  keeping  a  complete  record  of 
your  issued  stock  at  all  times.  Besides  showing  the 
names  of  stock,  or  shareholders,  you  should  have  a 
complete  record  of  their  addresses,  showing  street 
numbers,  or  postoffice  box  numbers  when  possible. 
Always  be  sure  to  note  any  change  of  address,  and 
change  these  on  your  records  at  the  time  you  receive 
this  information.  By  following  this  rule  you 
will  likely  save  yourself  a  lot  of  grief.  A  good 
ledger  for  this  purpose  is  put  out  by  the  Dorsey  Com- 
pany, 1000  Commerce  Street,  Dallas,  Texas,  and  if 
same  cannot  be  purchased  from  your  local  stationery 
supply  house,  you  may  order  it  direct  from  the  com- 
pany in  Dallas.  When  ordering  call  for  Stock  Certifi- 
cate Ledger  No.  3462,  which  may  be  had  in  200,  400  or 
600  pages. 

The  next  thing  on  your  program  is  your  regular 
set  of  books.  As  I  said  before,  I  will  not  attempt  to 
outline  a  set  of  books  to  cover  your  business,  as  I  am 
not  familiar  with  it.  Some  accountants  prefer  a 
three-book  system,  consisting  of  a  two  column  journal, 
a  cash  book  and  a  ledger.  Others  prefer  a  col- 
umnar journal  with  enough  columns  to  cover  their 
segregated  expense  accounts,  adding  these  columns 
at  the  end  of  each  month  and  carrying  these  totals  to 
their  respective  accounts  in  the  ledger.  When  one 
person  has  a  lot  of  work  to  handle  there  is  no  doubt  but 
that  person  can  handle  more  business  in  less  time  with 
a  columnar  journal,  covering  the  different  expense  ac- 
counts with  one  posting  of  each  to  the  ledger,  than 
could  be  handled  by  the  individual  posting  of  each  sepa- 
rate item  to  the  ledger..  With  a  set  of  books  of  this 
kind  made  for  your  individual  business  needs  you 
would  certainly  have  an  ideal  bookkeeping  system. 


761708 


The  first  entry  to  be  made  in  your  journal  is  a 
charge  to  your  Unissued  Stock  and  a  Credit  to  your 
Capital  Stock  Account.  Charge  your  Unissued  Stock 
Account  with  the  amount  your  company  is  capitalized 
for,  and  credit  your  Capital  Stock  Account  with  the 
same  amount.  Some  accountants  use  the  term  Treas- 
ury Stock,  where  I  use  Unissued  Stock.  But  no  mat- 
ter what  it  is  called,  it  merely  represents  Unissued 
Stock  in  your  Stock  Certificate  Book,  and  nothing  else. 

If  the  officials  of  your  company  see  fit  to  trade 
Unissued  Stock  for  Leases,  Royalties,  Fee  Holdings,  or 
shares  in  other  companies,  you  should  then  charge 
these  different  accounts  with  the  par  value  of  the  stock 
traded  by  your  company,  and  credit  your  Unissued 
Stock  Account  with  the  same  amount.  Make  a  com- 
plete detailed  record  of  the  transaction  in  your  journal, 
stating  the  number  of  shares  traded,  the  par  value  of 
each  share,  and  the  total  amount.  Also  give  the  num- 
ber of  acres  you  received  in  the  trade,  the  State  and 
County  in  which  this  acreage  is  located,  also  the  price 
per  acre.  If  shares  in  other  companies  are  received  in 
exchange  for  Unissued  Stock  in  your  company,  give  the 
name  of  the  company,  the  number  of  shares  received 
in  the  exchange,  the  book  value  of  same,  the  par  value 
of  same,  also  book  value  placed  on  it,  if  different 
than  par  value.  And  remember  that  you  cannot  make 
a  journal  entry  too  complete. 

Issue  the  stock  which  has  been  traded,  and  handle 
the  matter  just  as  explained  to  you  before.  The  traded 
stock  will  require  the  same  revenue  as  if  it  had  been 
sold  for  cash. 

It  is  a  good  plan  to  write  all  of  your  stockholders 
at  frequent  intervals,  especially  when  anything  of  im- 
portance comes  up,  be  it  good  news  or  bad.  They 
will  appreciate  your  confidence  in  them,  and  they  are 
certainly  entitled  to  this  information,  for  it  was  their 
confidence  and  money  that  made  the  starting  of  this 
company  possible,  and  if  they  retain  this  confidence  in 
you,  they  may  be  the  means  of  assisting  you  in  the 
launching  of  many  other  successful  ventures.  If  your 
company  is  on  a  dividend  paying  basis  a  letter  should 
be  sent  out  with  every  dividend  payment,  giving  them 
a  statement  of  the  business  at  that  time,  also  telling 
them  of  your  plans  for  the  future.  A  letter  and  state- 
ment should  be  sent  to  them  at  the  close  of  your  busi- 
ness year,  and  after  your  books  have  been  audited. 

It  is  much  better  for  a  company  when  starting  a 
drilling  campaign,  unless  the  manager  is  an  experi- 
enced oil  operator,  to  have  the  wells  drilled  by  contract. 
And  if  done  by  contract,  select  a  drilling  contractor  who 
has  a  successful  drilling  record  in  the  particular  field  in 
which  you  are  operating.  As  I  have  known  more  com- 
panies to  go  on  the  rocks  on  their  first  wells  and 
through  inexperience,  than  all  other  causes,  as  a  lot  of 
men  working  in  the  oil  fields  will  take  advantage  of 
your  inexperience,  and  protracted  fishing  jobs  and 
junked  holes  will  rapidly  drain  your  drilling  fund,  an^l 
put  you  out  of  business.  And  my  advice  to  a  company 
when  drilling  their  first  well,  if  the  life  of  the  company 
depends  on  their  getting  a  producer,  is  to  offer  each 
and  every  man  on  the  job,  from  the  contractor  down  to 
the  roustabouts,  a  nice  bonus  for  bringing  in  a  well,  for 
by  doing  this  you  have  done  everything  which  is 
humanly  possible  to  assure  a  producing  well.  And  if  it 
comes  in  a  real  oil  well  this  matter  of  expense  will  soon 
be  forgotten.    And  many  a  hole  has  come  in  dry,  which 


was  surrounded  by  production,  because  the  boys  on  the 
job  were  simply  making  hole  at  so  much  per  foot,  re- 
gardless of  what  the  result  might  be,  and  it  is  a  very 
easy  matter  to  pass  up  a  producing  oil  sand  when  not 
watching  closely,  especially  with  a  rotary  machine. 

If  your  company  gets  a  producing  well,  or  if  they 
should  dispose  of  some  of  their  holdings  at  a  profit, 
this  money  will  probably  in  time  be  disbursed  as  a  divi- 
dend to  your  shareholders.  In  this  event  you  will  open 
a  Surplus  and  Dividend  Account.  Charging  your  Sur- 
plus and  Crediting  your  Dividend  Account  with  the 
amount  you  have  set  aside  to  be  paid  as  a  dividend,  if 
you  have  a  number  of  shareholders  it  will  require  quite 
a  bit  of  time  to  enter  each  individual  check  in  your 
journal.  But  my  method  is  to  charge  your  Dividend 
Account  with  the  total  amount  of  the  dividend  paid, 
and  to  credit  the  bank  with  a  like  amount,  making  a 
journal  explanation  like  this.  Checks  Nos.  536  to  834 
to  cover  a  25%  dividend  paid  to  shareholders  of  record 
July  21st,  1922.  This  will  wipe  out  your  Dividend  Ac- 
count on  your  ledger  and  leave  your  Surplus  Account 
to  be  charged  off  of  your  book  at  the  close  of  the  year. 

As  there  is  only  one  item  of  tax  which  affects 
Stock  Companies  exclusively,  namely,  the  Capital  Stock 
Tax,  we  will  take  it  up  now  and  later  under  the  heading 
of  The  Oil  Business  in  General.  We  will  take  up  all 
other  tax  matters  in  detail. 

This  Capital  Stock  Tax  is  a  Federal  Tax  and 
amounts  to  $1.00  per  thousand  on  each  $1,000.00  over 
$5,000.00  on  the  value  of  your  stock  at  the  end  of  the 
year  as  determined  by  your  balance  sheet  of  that  date. 
This  tax  is  payable  in  advance  and  should  not  be  over- 
looked, as  it  bears  a  penalty. 

If  for  any  reason  or  at  any  time  you  should  decide 
to  dissolve  your  company — that  is,  after  this  decision 
has  been  reached  by  your  board  of  directors,  or  trus- 
tees, as  the  case  may  be.  The  next  step  will  be  to  close 
out  all  of  your  remaining  assets  to  the  best  possible 
advantage,  and  deposit  this  money  in  the  bank.  And 
after  paying  in  full  all  outstanding  indebtedness 
against  your  company,  and  laying  aside  a  sufficient 
fund  to  cover  all  of  the  expense  necessary  to  properly 
close  the  business,  then  notify  your  shareholders  of 
the  whole  transaction,  and  tell  them  that  this  money 
will  be  paid  out  as  a  liquidating  dividend.  Also  request 
them  to  send  in  their  stock  certificates  to  the  com- 
pany's office  by  a  certain  date,  naming  a  date  at  least 
two  weeks  ahead  in  order  to  give  them  a  chance  to  have 
them  all  in  by  that  date.  On  receipt  of  these  stock  cer- 
tificates same  should  be  cancelled  and  pasted  onto  the 
original  stubs  in  your  stock  certificate  book.  When 
all  shares  are  in  and  have  properly  been  taken  care  of, 
you  are  then  ready  to  start  mailing  out  your  checks. 
Each  shareholder  of  record  should  be  mailed  a  check  to 
cover  their  proportional  part  of  this  Liquidating  Divi- 
dend, according  to  the  number  of  shares  which  they 
own,  as  shown  by  the  certificates  which  they  sent  in, 
if  this  amount  corresponds  with  their  account  on  your 
Stock  Ledger.  On  a  liquidating  dividend  you  may  mail 
out  the  checks  as  soon  as  you  receive  the  original  cer- 
tificates from  the  different  stockholders,  and  have 
them  pasted  onto  the  original  stubs  in  your  stock  cer- 
tificate book,  or  books.  In  case  your  assets  should  be 
sold  on  a  time  basis,  with  an  initial  payment  down,  it 
will  be  better  to  pay  your  Liquidating  Dividends  in  in- 
stallment payments  also.    Number  these  dividends  be- 


ginning  at  number  one,  until  all  of  the  money  has  been 
disbursed.  You  are  then  ready  to  have  your  legal  de- 
partment file  dissolution  papers  with  your  Secretary  of 
State.  Close  your  books,  and  after  putting  them  in  a 
safe  place  for  future  reference,  the  transaction  will  be 
completed. 

All  resolutions  pertaining  to  this  matter  should  be 
fully  entered  in  your  minute  book,  giving  the  names  of 
all  members  present,  also  making  a  statement  of  how 
each  voted,  unless  the  vote  was  unanimous,  and  if  so 
state  so.  In  case  all  of  the  certificates  are  not  returned 
to  you  before  this  matter  is  closed,  the  funds  remain- 
ing in  the  bank  to  cover  the  amount  of  said  certificates 
should  be  placed  in  the  hands  of  a  trustee  appointed 
for  this  purpose,  preferably  some  official  of  the  bank 
in  which  these  funds  are  deposited.  This  money  should 
be  held  subject  to  presentation  of  the  stock  certificates 
which  show  on  your  books  as  not  having  participated 
in  the  Liquidating  Dividends. 

THE  OIL  BUSINESS  IN  GENERAL 

While  not  advocating  any  particular  system  of 
books  to  meet  the  requirements  of  the  Oil  Business  in 
General,  as  I  claim  that  each  individual  company  needs 
a  system  especially  designed  to  meet  the  requirements 
of  that  particular  company,  especially  the  larger  ones, 
I  myself  have  successfully  used  for  independent  oper- 
ators, partnership  and  small  companies,  a  two  lx)ok 
system  consisting  of  a  three  column  loose  leaf  journal 
and  a  loose  leaf  ledger.  An  ideal  journal  for  this  pur- 
pose is  an  I.  P.  loose  leaf  journal  page,  number  317-3, 
which  may  be  used  either  in  a  canvas  or  corduroy  bin- 
der to  suit  your  ideas  on  this  matter,  and  an  I.  P. 
ledger  sheet  number  17-5.  If  you  really  want  a  binder 
which  is  a  time  saver  and  at  the  same  time  substantial 
and  worthy  of  a  place  in  any  office,  do  not  fail  to  in- 
vestigate an  I.  P.  binder  number  3217.  These  books 
may  be  purchased  from  your  stationery  supply  house, 
or  from  the  Irving-Pitt  Mfg.  Company  of  Kansas  City, 
Mo.,  who  are  the  makers  of  same. 

I  eliminate  the  cash  book  by  using  the  third  col- 
umn of  my  journal  to  carry  all  of  the  credits  to  the 
bank  which  I  check  on.  By  this  system  you  can  have 
as  many  depositories  as  you  desire.  But  you  must  use 
only  one  bank  to  check  from.  My  idea  in  eliminating 
the  cash  book  is  this:  There  is  no  accountant  who  is 
infallible,  and  it  stands  to  reason  that  the  fewer  times 
you  handle  a  figure,  the  less  liable  you  are  to  misplace 
same,  or  make  a  mistake.  Besides  this,  you  save  a  lot 
of  time. 

Use  your  first  column  for  all  of  your  debit 
items,  including  all  charges  to  your  bank,  or  banks. 
Use  your  second  column  for  all  credit  items,  except 
credits  to  the  bank  on  which  you  check  against.  The 
third  column  is  to  be  used  exclusively  to  credit  all 
checks  against  the  bank  on  which  you  check.  This  col- 
umn may  be  totaled  daily,  or  can  be  carried  to  the  end 
of  the  month,  when  total  may  be  carried  as  a  vi'hole  as 
a  credit  to  your  bank  account.  This  item  alone  will 
save  you  a  lot  of  time. 

THE  OPENING  ENTRY 

Any  money  or  equivalent  put  into  the  oil  business, 
be  it  for  independent  operator,  partnership,  or  com- 
pany, except  stock  companies,  should  be  credited  to 
Capital  Account.     The  most  frequent  equivalents  to 


cash  in  the  oil  business  usually  consist  of  leases,  fee 
holdings  and  royalties.  Sometimes  drilling  machinery, 
well  equipment,  such  as  pipe,  casing,  and  tools,  also  au- 
tomobiles, are  taken  in  as  an  equivalent  for  cash. 

If  cash  alone  is  put  into  the  business  to  start  with, 
your  opening  entry  would  be  like  this:  Charge  First 
National  Bank  $50,000.00  and  Credit  Capital  Account 
$50,000.00.  Make  a  full  explanation  of  this  transac- 
tion in  your  journal  entry,  giving  source  from  which 
this  money  was  derived,  and  any  other  details  neces- 
sary to  make  it  thoroughly  clear  to  anyone  who  may 
have  to  refer  to  the  journal  for  this  information. 

We  all  know  that  bookkeeping  is  only  a  daily  his- 
tory of  your  business,  but  in  most  cases  the  history  is 
too  brief  to  be  of  much  value,  even  to  the  person  who 
records  same,  for  it  is  almost  impossible  for  anyone  to 
remember  in  detail  transactions  after  they  are  a  year 
old,  and  should  the  accountant  in  charge  die,  or  leave 
your  employ,  it  might  be  necessary  for  the  new  man  in 
charge  to  have  to  go  through  all  of  your  files  in  order 
to  find  the  original  papers,  invoices  and  statements 
necessary  to  make  this  matter  clear,  and  this  would  re- 
quire much  more  time  than  it  would  have  taken  to 
make  a  detailed  journal  entry  at  the  time  this  entry 
was  originally  made.    And  time  means  money. 

My  idea  is  to  make  your  journal  a  detailed  history 
of  your  business.  Make  the  record  so  clear  that  any- 
one on  looking  over  same  can  understand  it  as  plainly 
as  you  do,  regardless  of  whether  they  understand  the 
first  principles  of  bookkeeping  or  not. 

If  a  cash  equivalent  such  as  leases,  fee  holdings, 
royalties,  drilling  machinery,  well  equipment  and  auto- 
mobiles are  used,  enter  each  of  these  items  separately 
on  your  debit  side,  with  cash  value  of  same  opposite 
each  item.  And  after  these  items  have  been  totaled, 
credit  the  total  as  a  whole  to  your  Capital  Account,  and 
make  a  detailed  journal  entry  of  each  item.  For  in- 
stance, if  it  should  be  a  lease,  give  the  State  and 
County  in  which  this  acreage  is  located,  the  number  of 
acres  in  same,  the  price  per  acre  it  is  to  be  valued  on 
your  books,  and  the  lessor's  name.  Fee  holdings  and 
royalties  should  be  entered  the  same  way. 

For  drilling  machinery  and  well  equipment  you 
should  make  an  itemized  list,  taking  every  part  in  de- 
tail, giving  the  book  value  price  on  each  article  when 
possible.  As  this  is  very  important  in  case  you  should 
sell  same,  so  that  you  can  determine  the  loss  or  gain 
on  same.  On  automobiles  you  should  list  the  make  of 
car,  the  model,  engine  and  license  number,  also  the 
book  value  placed  on  same. 

NAMES  OF  ACCOUNTS 

The  following  accounts  are  the  ones  most  likely  to 
be  used  in  the  oil  business,  but  of  course  there  may  be 
many  others  come  up  in  your  particular  business.  If  so, 
open  up  an  account  to  take  care  of  same. 

Bank  Account:  ;> %;■ 

Accounts  Receivable  ."gal 

Notes  Receivable  •  -    .    -  .t- 

Oil  and  Gas  Wells  (Active)  .  .^ 

Royalties   (Active)  :  " 

Royalties  (Inactive)  -  - 

Leases  Semi-Proven 
Leases  (Inactive) 
Leases  (Wildcat)    rrjT  j.-. 
Fee  Holdings  '  '  ' 


-^- 


Furniture  and  Fixtures 

Stocks  and  Bonds  in  Other  Companies 

Drilling  Machines  (Standard) 

Drilling  Machines  (Rotary) 

Pulling  Machines 

Engines 

Boilers 

Pumps 

Tools 

Equipment 

Pipe  Lines 

Casing 

Tanks 

Warehouse 

Buildings 

Vehicles  ^  ■ 

Live  Stock 

Automobiles 

Trucks 
Capital  Accounts: 

Accounts  Payable 

Income 
Expense  Accounts: 

Automobile 

Office  . 

Lease  Rental 

Lease  and  Royalty 

Legal  and  Audit 

Office  Supplies  and  Expenses 

Salaries 

Taxes 

Telephone  and  Telegraph 

Travel  Expense 

Donations 

Interest,  Discount  and  Revenue 

Lease  Expense 

Well  Expense 

We  will  now  go  into  details  concerning  the  above 
accounts,  starting  with  Bank  Account. 

Under  Heading  of  Bank  Account.  Give  a  double 
page  in  your  Ledger  to  each  bank.  But  remember  if 
you  use  a  three  column  journal,  that  you  are  only  to 
use  one  bank  to  check  from.  The  other  bank  accounts 
should  be  used  as  a  reserve.  And  the  only  time  you 
should  check  against  them,  is  when  you  transfer  money 
from  one  or  all  of  them  to  the  bank  where  you  carry 
your  checking  account.  In  such  a  case  credit  your  re- 
serve bank,  or  banks  in  the  second  column  of  your 
journal. 

Under  Accounts  Receivable  you  should  charge  all 
outstanding  accounts  due  your  company,  except  those 
which  are  secured  by  notes.  Give  the  names  of  the  in- 
dividuals, or  companies  owing  this  money,  also  the 
amount  of  indebtedness,  and  the  date  which  you  expect 
payment  of  same.  Be  sure  and  give  a  complete  item- 
ized journal  entry  of  all  transactions  under  this  head- 
ing. 

Under  Notes  Receivable  you  should  charge  all  out- 
standing secured  paper  due  your  company.  Give  the 
names  of  the  individuals  and  companies  who  signed 
these  papers,  also  the  amount  of  the  principal,  and  the 
dates  when  payments  are  due.  Be  sure  and  have  a 
complete  itemized  journal  entry  covering  each  individ- 
ual transaction  under  this  heading,  including  the  rate 
of  interest  they  bear. 


Under  Oil  and  Gas  Wells  Active  you  should  charge 
all  producing  oil  and  gas  wells  with  their  actual 
cost.  Opening  an  account  with  each  individual  well 
when  same  is  started,  and  only  use  the  group  heading 
of  Oil  and  Gas  Wells  Active  on  your  balance  sheet. 
This  matter  will  be  taken  up  later  under  heading  of 
"Drilling  Wells." 

Under  Royalties  Active  you  should  charge  all  pro- 
ducing royalties,  giving  the  name  of  the  land  owner, 
your  royalty  interest,  the  number  of  acres  your  royalty 
covers,  the  State  and  County  in  which  this  acreage  is 
located,  and  the  purchase  price  of  same.  Be  sure  and 
have  a  complete  itemized  journal  entry  on  each  indi- 
vidual royalty. 

Under  Royalties  Inactive  make  the  same  charges 
which  you  made  on  your  Royalties  Active. 

Under  Semi-Proven  Leases.  Charge  all  leases  that 
adjoin  proven  leases,  but  which  have  not  been  tested. 
Give  the  names  of  the  land  owners,  the  County  and 
State  in  which  this  acreage  is  located,  the  number  of 
acres  each  lease  contains,  also  the  purchase  price  per 
acre  on  each  lease. 

Under  Inactive  Leases.  Charge  all  leases  in  or 
near  producing  oil  fiends  on  which  no  development 
work  has  been  started.  Make  the  same  journal  entry 
you  have  on  Semi-Proven  Leases. 

Under  Leases  (Wildcat) .  Charge  all  leases  which 
are  owned  by  your  company  that  are  not  in  or  near  any 
proven  oil  field.  Give  the  name  of  the  land  owner,  the 
County  and  State  in  which  this  acreage  is  located,  the 
number  of  acres  in  each  lease,  also  the  purchase  price 
per  acre  on  each  lease. 

Under  Fee  Holdings.  Charge  all  land  owned  in  fee 
by  your  company,  giving  the  name  of  the  original  land 
owner,  the  County  and  State  in  which  this  land  is 
located,  the  number  of  acres  in  each  fee  owned,  and  the 
purchase  price  per  acre. 

Under  Furniture  and  Fixtures.  Charge  all  ar- 
ticles, such  as  rugs,  desks,  tables,  chairs,  costumers, 
cuspidors,  waste  baskets,  filing  cabinets,  safes,  type- 
writers, adding  machines,  check  protectors,  ink  stands, 
wall  maps,  pen  racks  and  any  other  office  appliances. 
Make  an  itemized  journal  entry  of  each  item,  giving 
prices  and  descriptions  on  same  as  taken  from  the  item- 
ized invoice  received  from  the  people  from  whom  these 
articles  are  purchased. 

Under  Heading  of  Stocks  and  Bonds  in  Other  Com- 
panies. Charge  all  stocks  and  bonds  you  own  in  other 
companies,  giving  the  name  of  the  company,  the  num- 
ber of  shares  in  each  company,  the  book  value  of  same, 
the  par  value  of  same,  also  book  value  placed  on  same  if 
different  than  par  value. 

Under  Drilling  Machines  (Standard) .  Give  num- 
ber of  standard  rigs  owned  by  your  company,  kind  or 
make  of  machine,  or  machines,  also  state  number  of 
same,  if  same  are  numbered,  as  in  case  it  is  a  Star  or 
Armstrong  machine.  State  if  the  rig  is  completely  fit- 
ted, and  if  not  what  part  or  parts  are  missing,  also  give 
purchase  price  on  each  rig  as  it  stands. 

Under  Heading  of  Drilling  Machines  (Rotary). 
Make  the  same  charge  as  you  did  on  your  standard 
machines. 


Under  Heading  of  Pulling  Machines.  Give  name, 
number  and  horsepower  on  all  rod,  tube  puUing  and 
bailing  machines  owned  by  your  company,  also  pur- 
chase price  of  each  machine. 

Under  Heading  of  Engines.  Charge  all  engines 
owned  by  your  company,  giving  name  of  maker,  horse- 
power and  purchase  price  of  each;  also  state  if  steam 
or  gas. 

Under  Heading  of  Boilers.  Give  name  of  maker, 
the  horsepower,  weight,  also  the  purchase  price  of 
same. 

Under  Heading  of  Tools.  Charge  all  tools  owned 
by  your  company.  I  prefer  to  divide  this  account  un- 
der two  headings,  namely,  Small  Tools  and  Drilling 
Tools.  Small  tools  to  include  tools  commonly  used  by 
carpenters  and  gardeners,  such  as  saws,  squares,  ham- 
mers, chisels,  etc.,  and  hoes,  rakes,  picks  and  shovels. 
Drilling  tools  to  include  all  tools  used  in  drilling  oil 
wells.  A  complete  list  of  these  tools  can  be  found  in  a 
Continental  Supply  Company  catalogue,  which  they 
will  be  pleased  to  send  you  on  request  from  their  office 
at  1139  Ohve  Street,  St.  Louis,  Mo.,  where  they  main- 
tain headquarters.  Give  the  name  of  each  tool  and  the 
price  of  each  in  your  journal  entry. 

Under  Heading  of  Equipment.  Charge  all  parts 
and  fittings  not  included  under  headings  of  Drilling 
Machines,  Pulling  Machines,  Engines,  Boilers,  Pumps 
and  Tools,  giving  name  of  each  piece,  also  purchase 
price  of  same.  Your  Continental  Supply  Company  cata- 
logue will  give  you  the  names  of  all  equipment  used 
around  oil  properties.  And  I  have  always  found  this 
company  reliable  and  courteous,  and  their  service  is  un- 
equalled, as  they  maintain  branches  in  every  proven 
field  in  the  United  States,  and  are  also  in  a  position  to 
handle  business  in  all  other  oil  and  gas  fields  in  the 
world. 

Under  Heading  of  Pipe  Lines.  Charge  all  pipe 
owned  by  your  company,  which  is  used  in  oil  lines, 
water  lines  and  flow  lines,  giving  material,  size,  and 
weight,  also  number  of  feet  in  each  and  the  purchase 
price  per  foot. 

Under  Heading  of  Casing.  Charge  all  casing 
owned  by  your  company  above  ground,  giving  material, 
size,  length  and  weight,  also  purchase  price  per  foot. 

Under  Heading  of  Tanks.  Charj^e  all  tanks  owned 
by  your  company,  giving  material,  size  and  capacity  of 
each,  also  purchase  price  of  each. 

Under  Heading  of  Warehouse  Account.  Charge 
all  material  of  any  kind  which  you  have  on  hand  in 
your  warehouse,  if  you  have  one.  This  matter  will  be 
taken  up  later  under  heading  of  Warehouse. 

Under  Heading  of  Buildings.  Charge  all  buildings 
owned  by  your  company,  including  power  houses,  pump 
houses,  warehouses,  also  houses  used  by  employees  if 
owned  by  your  company,  also  garages,  stables  and 
other  buildings,  if  any.  Give  full  description  of  same, 
including  size,  material  and  purchase  price  of  each. 

Under  Heading  of  Live  Stock.  Charge  all  live  stock 
owned  by  your  company,  giving  full  description  of 
each,  also  purchase  price  of  each. 


Under  Heading  of  Vehicles.  Charge  all  wagons 
and  horse  drawn  vehicles  owned  by  your  company,  giv- 
ing full  description  of  each,  also  purchase  price  of  each. 

Under  Heading  of  Automobiles.  Charge  all  Auto- 
mobiles owned  by  your  company,  giving  the  name  or 
make  of  each,  the  model,  engine  and  license  number  of 
each,  also  the  purchase  price  of  each. 

Under  Heading  of  Trucks.  Make  the  same  charge 
as  you  did  on  Automobiles. 

Under  Heading  of  Accounts  Payable.  Credit  the 
different  firms,  individuals,  and  companies  with  the 
separate  amounts  due  them  by  your  company,  giving  a 
complete  itemized  list  of  the  articles  purchased  from 
them,  also  purchase  price  covering  each  article,  and 
naming  discount  date,  if  any. 

Under  Heading  of  Notes  Payable.  Credit  the  dif- 
ferent individuals,  firms,  and  companies  with  the  sepa- 
rate accounts  owed  them  by  your  company  and  secured 
by  your  note,  or  notes.  Give  a  complete  itemized  jour- 
nal entry,  including  each  separate  transaction,  the  date 
notes  are  payable,  the  rate  of  interest  on  each,  and  the 
total  amount  of  interest  due  on  each  note. 

N.  B. 

If  yours  is  a  large  company  it  may  be  more  con- 
venient to  have  separate  Accounts  Payable  and  Ac- 
counts Receivable  Ledgers.  If  so,  post  same  directly 
from  your  journal  to  your  proper  ledger. 

Before  taking  up  the  matter  of  Income,  I  am  going 
to  make  a  suggestion  as  to  the  way  I  handle  my 
Ledger  Accounts.  I  divide  the  ledger  in  five  sections. 
In  the  first  section  I  group  all  Asset  Accounts,  includ- 
ing Accounts  and  Notes  Receivable.  In  the  second  sec- 
tion I  group  Accounts  and  Notes  Payable  Accounts. 
And  in  the  third  section  I  group  all  of  the  Income  Ac- 
counts. In  the  fourth  section  I  group  all  of  the  Ex- 
pense Accounts,  and  in  the  fifth  section  I  group  all  of 
the  Capital  Accounts,  including  the  Surplus  Account.  I 
use  the  Surplus  Account  to  take  care  of  all  transactions 
pertaining  to  the  Capital  Account  until  the  close  of  the 
year,  then  I  charge  same  off  to  Loss  and  Gain.  Trans- 
actions that  are  most  frequently  handled  under  this  ac- 
count are  leases  which  are  dropped  or  sold  and  transac- 
tions of  like  kind. 

Under  Heading  of  Income.  Credit  all  money  re- 
ceived from  sale  of  production  from  oil  and  gas  wells, 
also  active  royalties.  In  fact,  from  all  sources  received, 
except  from  the  sale  of  Capital  Assets,  which  will  be 
handled  by  your  Surplus  Account.  Open  a  separate 
account  with  each  producing  oil  and  gas  well,  also  pro- 
ducing royalties,  using  the  name  under  which  same 
was  drilled  in  the  case  of  producing  oil  and  gas  wells. 
This  name  may  be  taken  from  the  log  of  the  well.  In 
the  case  of  active  or  producing  royalties,  use  the  name 
of  the  land  owner. 

Keep  the  production  statements  received  from  the 
company  who  purchased  your  oil  and  gas  each  in  a 
separate  filing  folder,  and  place  same  in  front  of 
the  folder  in  your  filing  cabinet,  which  contains  the 
well  or  royalty  folder  pertaining  to  same.  I  will  take 
up  this  matter  again  in  speaking  of  drilling  wells  under 
heading  of  Lease  Development, 


^7— 


EXPENSE  ACCOUNTS 

Under  Heading  of  Office  Rent.  Charge  all  money 
paid  out  for  this  purpose,  and  in  your  journal  entry  on 
same,  state  to  whom  paid,  for  what  month,  the  number 
of  the  room,  or  rooms,  also  the  amount  paid. 

Under  Heading  of  Lease  Rental.  Charge  all  money 
paid  out  for  this  purpose.  And  in  your  journal  entry 
state  to  whom  paid,  give  the  number  of  the  lease,  the 
number  of  acres  in  same,  the  date  lease  rental  is  due, 
and  the  amount  paid.  Also  state  if  this  is  a  quarterly, 
semi-annual  or  annual  payment. 

Under  Heading  of  Lease  and  Royalty  Expense. 
Charge  all  money  paid  out  for  recording  and  assign- 
ment fees,  also  abstracts.  In  your  journal  entry,  state 
what  lease  or  royalty  this  money  was  paid  on,  the  name 
of  the  party  the  money  was  paid  to,  and  the  amount. 

Under  Heading  of  Legal  and  Audit  Expense. 
Charge  all  money  paid  out  for  this  purpose.  In  your 
journal  entry  on  same  state  to  whom  paid,  the  month, 
time,  or  item  this  payment  covers,  the  service  per- 
formed, and  the  amount  paid. 

Under  Heading  of  Office  Supplies  and  Expense. 
Charge  all  money  paid  out  for  the  following  items: 
Stamps,  pens,  ink,  pencils,  erasers,  typewriter  ribbons, 
adding  machine  tape,  carbon  paper,  stationery  and  all 
other  small  and  necessary  articles  used  in  an  office. 

Under  Heading  of  Salaries.  Charge  all  money  paid 
out  for  this  purpose.  And  in  your  journal  entry  on 
same,  state  to  whom  paid,  the  service  performed,  the 
time  payment  covers,  and  the  amount. 

Under  Heading  of  Telegraph  and  Telephone. 
Charge  all  money  paid  out  for  this  purpose.  And  in 
your  journal  entry  on  same  make  a  detailed  explana- 
tion of  same,  giving  number  of  the  phone  on  which  con- 
tract and  toll  service  is  being  paid,  also  period  covered 
by  this  payment,  and  the  amount.  Telegrams  should 
be  handled  in  the  same  way. 

Under  Heading  of  Travel  Expense.  Charge  all 
money  paid  out  for  this  purpose  that  would  come  under 
necessary  expense  to  the  business.  And  in  your  jour- 
nal entry  state  to  whom  paid,  and  what  trip  this  ex- 
pense covers,  also  itemized  list  of  the  expense  in  ques- 
tion, showing  railroad  fare,  hotel  bills,  cab  or  automo- 
bile hire  and  other  details,  if  any.  A  nice  way  to  keep 
this  expense  is  for  the  party  who  makes  these  trips  to 
keep  an  itemized  list  of  same  on  an  I.-P.  loose  leaf 
Salesmen  Expense  Book,  form  C-51.  These  sheets 
should  be  used  in  an  I.-P.  binder  No.  104.  This 
will  make  an  ideal  book  for  this  purpose,  and  same  may 
be  purchased  from  your  stationery  supply  house,  or  or- 
dered from  Irving-Pitt  Mfg.  Company,  Kansas  City, 
Mo. 

Under  Heading  of  Interest,  Discount  and  Revenue. 
Charge  all  money  paid  out  for  interest  and  revenue, 
and  credit  all  money  received  as  a  discount  on  paid 
bills.  Give  a  detailed  itemized  statement  of  each  trans- 
action, showing  to  whom  the  money  was  paid,  on  what 
note,  or  notes,  the  time  covered  by  this  payment,  and 
the  amount  of  each  separate  item.  On  discount  credit 
all  money  received  for  this  purpose,  stating  from  whom 
same  was  received,  and  on  what  invoice,  or  invoices, 
the  time  covered  by  same,  also  the  amount.    In  all  jour- 


60.00 


nal  entries  give  as  much  detail  as  possible,  as  these  ex- 
planations may  prove  very  valuable  some  time. 

Under  Heading  of  Donations.  Charge  all  money 
paid  out  for  this  purpose.  And  in  your  journal  entry, 
state  to  whom  money  was  paid,  and  for  what  purpose. 
Also  give  the  name  of  the  institution,  church,  or  organ- 
ization, and  be  sure  and  remember  when  you  are  clos- 
ing your  books  at  the  end  of  the  year  that  private  do- 
nation to  charities  cannot  be  charged  off  as  expense  on 
your  Income  Tax  Return,  as  the  Government  has  no 
way  to  check  up  on  items  of  this  nature,  and  they  re- 
quire a  full  explanation  of  all  items  of  this  nature 
which  are  deducted  on  your  Income  Return,  including 
the  name  of  the  church,  institution  and  organization. 

Under  Heading  of  Taxes.  Charge  all  money  paid 
out  for  this  purpose.  And  in  your  journal  entry  state 
to  whom  paid,  and  on  what  property,  and  where  lo- 
cated ;  also  state  if  same  is  city,  county,  state,  school, 
capital  stock,  or  income  tax.  Also  the  amount  of  each 
item  under  each  different  heading.  And  remember  m 
closing  your  books  at  the  end  of  the  year  that  no  In- 
come Tax  is  deductible  as  an  expense  item  from  your 
Income  Return.  So  be  sure  and  not  include  theni  with 
other  expense  items  under  heading  of  taxes.  Or  if  you 
wish  you  may  open  a  separate  account  to  take  care  of 
these  items,  under  heading  of  Income  Tax. 

EXAMPLES    FOR    JOURNAL    ENTRIES    ON    THE 
FOLLOWING  ACCOUNTS 

Lease  Rental  Account 60.00 

Bank  No.  68 
City  Nat'l  Bk.,  Graham,  Texas 
For  annual  lease  rental  on 
Lease  No.  72.  Containing  60 
acres.  Being  the  west  one-half, 
and  the  south  one-half  of  the 
east  one-half  of  the  southwest 
one-fourth  of  block  No.  1562,. 
H.  I.  G.  N.  Survey  in  Young 
County,  Texas.  Owned  by 
Sam  Burgess.  Rental  due  Jan. 
1st,  1922. 

Taylor  Well  No.  1.   Expense....  150.00 

Bank  No.   69 150.00 

Jack  Jones  (for  15  days  labor 
as  driller  on  Taylor  well  No.  1. 
First  half  of  January  @  $10.00 
per  day). 

Donation  25.00  ' 

Bank  No.  70 25.00 

United  Charities,  Ft.  Worth, 
Texas.  For  amount  subscribed 
to  annual  budget  for  1922. 

Taxes  - 40.20 

Bank  No.  71.- 40.20 

Lon  Smith  (State  Comptrol- 
ler) .  For  Gross  Receipt  Tax  of 
11/2%  on  1,554.10  bbls.  oil  pro- 
duced and  sold  at  an  average 
price  of  $1.50  plus  per  bbl.  To- 
tal amount  received  $2,593.43. 
Total  of  Gross  Receipt  Tax  on 
this  amount  $88.90.  Also  1-20 
of   1%    Tax,    regulating   Pipe 


—8- 


Lines,  on  the  above  amount  of 
oil.  1-20  of  1%  on  $2,593.43, 
being  $1.30.  Total  Tax  for 
Quarter  ending  December  31st, 
1921,  is  $40.20. 
Farmers  &  Mechanics  National 

Bank   146.77 

Hopkins  Well  No.  1.    Pro- 
duction      146.77 

65.14  barrels  of  oil  produced 
the  first  half  of  January,  and 
sold  to  the  Prairie  Oil  &  Gas 
Company  @  $2.25  per  barrel. 
Farmers  &  Mechanics  National 

Bank   207.52 

Davis  Well  No.  3.     Pro- 
duction      207.52 

Our  one-fourth  of  27,669,000 
M  cubic  feet  of  gas  produced 
in  the  month  of  January,  and 
sold  to  the  Texas  Company  @ 
.03c  per  M  cubic  feet.  Our  part 
6,917.250  M.  cubic  feet  @  .03c 
per  M.  cubic  feet  $207.52. 

THE  PURCHASE  REQUISITION 

You  will  find  a  number  of  useful  forms  in  my  Sys- 
tem. But  the  most  useful  and  necessary  form  is  my 
Purchase  Requisition.  As  there  is  no  way  for  a  man 
in  the  office  of  your  accounting  department  to  know 
what  is  going  on  in  any  department  other  than  his  own 
unless  he  is  told,  and  when  a  mass  of  invoices  and  bills 
flood  his  office  on  the  first  of  the  month,  he  is  certain- 
ly not  in  a  position  to  make  a  very  intelligent  disposi- 
tion of  same.  And  if  left  to  his  own  resources  and  the 
knowledge  gained  through  accounting  experience  in 
mercantile  lines,  you  will  find  many  items  charged  to 
investment  accounts  which  could  have  properly  been 
charged  to  expense,  if  he  had  had  the  necessary  infor- 
mation. In  other  words,  there  is  no  man  in  your  or- 
ganization, but  the  man  who  purchased  these  articles, 
who  is  in  a  position-  to  know  what  disposition  he  in- 
tends to  make  of  them  at  the  time  they  were  pur- 
chased. And  if  he  waited  until  the  end  of  the  month 
to  give  you  this  information,  it  is  likely  that  he  would 
have  forgotten  where  more  than  half  of  these  articles 
were  used.  By  the  use  of  my  Purchase  Requisition  and 
the  co-operation  of  purchasing  agent,  or  agents,  with 
your  accounting  department,  your  .accounting  depart- 
ment will  be  in  a  position  to  properly  charge  every  item 
purchased  during  the  month,  and  this  will  save  your 
company  thousands  of  dollars  in  the  course  of  a  year, 
besides  giving  you  much  valuable  information  which 
will  help  you  to  cut  down  your  expense  account,  and 
put  you  in  closer  touch  with  your  business.  Each  and 
every  man  in  your  organization  who  is  authorized  to 
make  purchases  for  your  company  should  be  supplied 
with  a  requisition  book.  These  books  are  made  in 
pocket  size  and  can  and  should  be  carried  at  all  times. 
The  pages  are  made  in  duplicate.  The  original  sheet  is 
to  be  handed  to  the  party  from  whom  goods  are  pur- 
chased, with  instructions  to  this  party  that  unless  this 
requisition  is  attached  to  the  invoice  when  same  iS 
mailed  to  your  office,  that  he  will  likely  never  hear  of 
same  again,  as  your  accounting  department  has  been 


instructed  not  to  enter  any  invoice  or  bill  unless  pur- 
chase requisition  properly  signed  by  the  man  who  made 
this  purchase  is  attached  to  same.  And  each  company 
with  which  you  carry  an  account  should  be  notified  by 
letter  to  the  same  effect.  The  duplicate  requisition  is 
left  in  the  book  as  a  record  in  case  of  any  controversy. 
On  the  original  purchase  requisition  the  purchasing 
agent  should  write  the  information  as  to  where  each 
item  is  to  be  used,  and  if  there  are  a  number  of  dispo- 
sitions to  be  made  of  these  items,  a  separate  sheet 
should  be  made  to  cover  each  separate  disposition.  In 
other  words,  if  he  was  buying  some  article  for  a  drill- 
ing rig,  others  for  a  pump,  or  automobile,  he  should 
make  a  separate  requisition  to  cover  articles  under 
each  heading,  as  in  this  way  there  can  be  no  doubt  in 
the  mind  of  your  accountant  as  to  the  proper  entry  to 
be  made  of  same. 

You  may  experience  a  little  trouble  with  your 
trades  people  at  the  start,  but  after  you  return  their 
invoices  a  couple  of  times,  with  notation  on  same  to 
please  attach  purchase  requisition  and  return  same  to 
you,  things  will  begin  to  work  smoothly.  And  once  you 
get  this  System  established  the  value  of  same  will  be 
more  apparent  each  day. 

You  will  find  a  copy  of  this  form  in  the  back  of 
this  book,  under  the  heading  of  FORMS. 

LEASES 

Another  very  important  matter  in  the  Oil  Busi- 
ness is  the  proper  handling  of  your  leases,  especially  if 
you  have  a  number  of  them,  as  many  a  valuable  lease 
has  been  lost  on  account  of  the  rental  dates  being  over- 
looked through  negligence,  or  through  lack  of  proper 
system  in  handling  this  important  matter.  But  if  my 
System  is  fully  carried  out,  I  will  assure  you  of  a  double 
check  on  each  lease  you  own  at  all  times.  When  a  lease 
is  turned  over  to  your  accounting  department,  a  copy 
should  be  made  of  same  and  placed  in  a  folder,  under 
heading  of  Matters  Pending.  The  original  lease  should 
be  sent  by  registered  mail,  with  a  return  receipt  re- 
quested, to  the  County  Clerk  of  the  County  in  which 
this  lease  is  located.  Request  him  to  record  same  and 
return  to  your  office,  with  a  statement  covering  his 
services.  When  this  lease  is  returned  to  your  office, 
prepare  a  folder  for  it,  as  each  lease  and  all  letters  and 
papers  pertaining  to  same,  including  abstracts,  lease 
rental  letters  and  receipts  should  be  placed  together  in 
one  folder  and  filed,  so  as  to  be  handy  to  refer  to  at 
any  time.  I  have  found  a  Yawman  &  Erbe  Fiberstock 
Folder  No.  4526-E  ideal  for  this  purpose,  as  it  is  roomy, 
and  when  fitted  with  a  Yawman  &  Erbe  Folder  D. 
3404-T,  which  gives  you  the  necessary  divisions  to  keep 
your  letters  and  receipts  separated  from  your  lease  and 
abstract,  you  will  have  a  safe  and  economical  recep- 
tacle for  this  purpose.  .Personally  I  can  recommend  the 
Yawman  &  Erbe  Filing  Equipment  and  Systems  to 
fully  meet  all  of  the  requirements  of  an  up-to-date 
business  of  any  kind.  And  their  Filing  Equipment  is 
much  superior  to  a  number  of  different  lines  on  the 
market,  which  can  readily  be  proved  by  comparison. 
Number  your  leases  consecutively,  beginning  at  num- 
ber one.  Also  place  this  number  anB  the  name  of  the 
land  owner,  and  the  County  in  which  it  is  located,  on 
a  tab  on  the  outside  of  your  folder  or  on  the  place  in- 
tended for  this  purpose  on  the  right  hand  top  of  your 
folder  No.  D-3404-T,  where  it  can  readily  be  seen.  Be- 
fore filing  this  lease  it  should   be   recorded   in   your 


—9— 


Lease  Ledger.  I  have  seen  a  number  of  ledgers  intend- 
ed for  this  purpose,  but  the  only  one  I  have  ever  seen 
which  will  meet  the  full  requirements  of  a  Lease 
Ledger,  is  an  L  P.  Loose  Leaf  Current  Ledger  No. 
267176,  put  out  by  the  Irving-Pitt  Mfg.  Company, 
Kansas  City,  Mo.  This  ledger  when  properly  filled 
with  Lease  Record  Form  No.  1  and  Lease  Rental  Sheet 
Form  No.  2  and  Lease  Expiration  Sheet  Form  No.  3, 
put  out  by  The  Boyd-Patterson  Company,  Inc., 
Printers,  1323-25  Wood  Street,  Dallas,  Texas,  you  will 
have  everything  which  is  required  of  a  Lease  Ledger. 

After  properly  entering  a  lease  on  these  three 
pages,  enter  same  on  both  your  lease  and  lease  rental 
cards.  Forms  for  same  will  be  found  in  the  back  of 
this  book,  under  heading  of  Forms.  Your  lease  will 
then  be  ready  to  file.  Handle  each  lease  in  the  same 
way,  and  if  you  have  leases  in  different  states  and 
counties,  your  ledger  should  be  tabbed  with  the  name 
of  each  county,  alphabetically  arranged,  in  which  you 
own  leases. 

This  ledger  should  be  revised  at  the  close  of  each 
year.  All  leases  which  have  expired,  or  have  been 
dropped,  or  sold  should  be  taken  out  from  among  your 
live  leases  and  be  filed  in  another  section  of  your 
ledger,  as  a  matter  of  record  and  reference. 

The  remaining  leases  should  be  kept  up  to  date.  If 
any  change  such  as  lease  sales  or  lease  trades  have 
been  made,  and  transferred  to  a  new  sheet,  showing 
the  exact  status  of  same  at  that  time,  your  lease  and 
lease  rental  cards  should  be  kept  in  an  indexed  card 
file  which  may  be  placed  on  your  desk  or  other  suitable 
place  where  it  will  be  handy  for  reference. 

Your  cards  should  be  placed  in  this  file  so  as  to 
show  lease  rentals  coming  due  in  January  in  the  De- 
cember compartment,  leases  coming  due  in  February 
in  the  January  compartment,  and  all  the  way  through 
the  year,  as  by  this  method  there  will  not  be  any  chance 
of  same  being  overlooked  until  too  late.  But  to  doubly 
safeguard  them,  and  also  to  give  the  Lease  Depart- 
ment, or  executive  who  may  look  after  such  matters,  a 
chance  to  pass  same  on  for  payment,  or  to  drop  same 
as  he  sees  fit,  I  make  up  a  schedule  of  the  rentals  com- 
ing due  for  three  months  ahead,  and  place  this  schedule 
in  the  hands  of  the  parties  who  are  responsible  for  the 
payment  of  this  rental.  This  schedule  contains  the  fol- 
lowing information :  The  number  and  the  name  of  the 
lease,  the  County  and  State  in  which  it  is  located,  the 
land  owner's  name  and  the  number  of  acres  in  same, 
also  tlj^e  rental  date  and  the  amount  of  rental  due,  and 
the  expiration  date  on  same.  And  always  state  if  this 
is  a  quarterly,  semi-annual,  or  annual  payment.  And 
in  this  connection  it  is  well  to  make  four  lease  rental 
cards  when  your  lease  rentals,  are  payable  quarterly, 
two  cards  when  payable  semi-annually,  and  keep  same 
in  their  proper  places,  so  that  there  will  be  no  possible 
chance  of  them  being  overlooked.  If  a  lease  sale  or 
trade  has  been  made  between  rental  dates,  same  should 
be  marked  up  on  your  lease  ledger,  and  also  a  notation 
of  same  should  be  made  under  remarks  on  your  rental 
card,  so  that  same  may  be  deducted  before  you  pay  an- 
other rental  on  same.  I  also  use  a  lease  sales  card.  A 
form  for  same  will  be  found  in  the  back  of  this  book 
under  heading  of  FORMS.  On  this  card  I  make  a  com- 
plete explanation  of  this  sale,  and  then  attach  same  to 
proper  lease  rental  card,  and  also  make  notation  on  this 


lease  rental  card  to  see  sales  card  attached  to  this 
rental  card. 

After  looking  over  quarterly  lease  rental  schedule, 
the  official  in  charge  of  this  matter  should  make  a  no- 
tation opposite  each  lease,  stating  if  lease  rental  shall 
be  paid,  or  if  lease  should  be  dropped.  Lease  rentals 
should  be  mailed  out  at  least  fifteen  days  before  they 
are  due,  so  as  to  give  them  plenty  of  time  to  reach  their 
destination  before  they  are  due.  And  to  make  sure 
that  this  matter  is  not  overlooked  it  is  best  to  mark  up 
your  payment  dates  on  your  daily  reminder.  Form  for 
same  will  be  found  in  the  back  of  this  book  under  head- 
ing of  FORMS.  All  letters  containing  lease  rentals 
should  be  registered,  and  a  request  for  a  return  receipt 
on  same  should  be  made  at  the  time  they  are  regis- 
tered. Forms  and  form  letters  will  be  found  in  the 
back  of  this  book  to  fully  take  care  of  this  important 
matter. 

When  a  lease  expires  or  is  dropped  the  party  in 
charge  of  this  department  should  get  a  couple  of  blank 
release  forms  and  make  out  a  release  covering  this 
lease,  also  making  a  copy  of  same  for  your  files.  Mail 
the  original  release,  after  it  has  been  properly  signed 
and  acknowledged  before  a  notary,  to  the  party  who 
owns  the  land.  File  your  copy  with  the  original  lease. 
Remove  the  folder  containing  this  lease  from  your  live 
leases,  and  in  a  transfer  case  place  all  of  your  released 
leases,  keeping  them  in  numerical  order  as  before. 

The  executive  who  has  charge  of  the  matter  per- 
taining to  leases  owned  by  his  company  should  keep  in 
close  touch  with  all  development  which  is  being  done, 
or  contemplated  on  acreage  adjoining  or  near  his  com- 
pany acreage,  so  that  he  will  be  in  a  position  to  either 
pass  for  payment,  or  drop  lease  rental  payments  as 
they  come  due  according  to  the  information  he  hason 
this  matter.  As  a  lot  of  money  can  be  lost  by  paying 
lease  rentals  on  acreage  after  it  has  been  practically 
proven  worthless  b}"  development  on  nearby  acreage. 
If  you  only  have  a  few  leases  I  would  not  advise  you  to 
go  to  the  expense  of  purchasing  a  Lease  Lederer,  as 
your  lease,  lease  rental  and  lease  sales  cards  will  take 
care  of  this  matter  nicely. 

LEASE  DEVELOPMENT  (DRILLING  WELLS) 

If  you  are  operating  in  the  State  of  Texas  or  other 
States  that  require  a  permit  from  the  Railroad  Com- 
mission, Oil  and  Gas  Division,  before  you  can  start  to 
drill  a  well,  you  will  have  to  get  the  necessary  blanks 
from  the  Commissioner's  office,  fill  same  properly  and 
return  to  the  Commissioner,  and  wait  until  you  receive 
a  permit  from  him  before  actual  drilling  operations  can 
be  started. 

We  are  now  ready  to  start  our.  drilling  campaign. 
After  picking  a  location  a  derrick  must  be  erected  and 
a  slush  pit  dug.  Also  tanks  must  be  provided  for  fuel 
oil  and  water.  These  things  are  necessary  and  must  be 
provided,  regardless  if  well  is  drilled  with  your  own 
drilling  rig,  or  if  drilling  is  to  be  done  by  contract.  We 
will  now  open  accounts  on  our  books  to  account  for  the 
money  which  will  be  spent  in  drilling  this  well.  Some 
accountants  prefer  to  charge  all  of  the  money  expended 
in  drilling  a  well  to  Well  Investment  Account.  And 
then  after  the  well  is  completed  they  go  back  and  dig 
out  all  of  the  expense  items  and  charge  them  to  Well 
Expense. 


—10— 


My  system  is  to  open  up  two  accounts  at  the  start. 
The  first  to  be  Well  No.  1  Expense  Account,  and  the 
other  to  be  Well  No.  1  Investment  Account.  My  reason 
for  doing  this  is  because  I  have  found  by  actual  expe- 
rience that  it  is  easier  and  much  time  can  be  saved  by 
handling  in  this  way  while  you  have  all  of  the  informa- 
tion, at  hand.  We  vdll  start  in  by  charging  to  our  Well 
Expense  Account  the  cost  of  the  derrick,  and  also  the 
cost  of  digging  the  slush  pit.  The  tanks,  if  any  are 
provided,  will  be  charged  to  your  Tank  Investment  Ac- 
count, and  in  your  journal  entry  on  same  be  sure  and 
state  the  material,  and  capacity  of  these  tanks.  If  the 
well  is  to  be  drilled  by  contract  you  will  likely  have  to 
stand  the  expense  of  moving  the  drilling  rig  from  its 
present  location  to  your  well  site.  If  so,  this  will  be 
charged  to  your  Well"  Expense.  Be  sure  and  make  a 
detailed  journal  entry  covering  same.  You  will  also 
have  to  furnish  the  fuel  and  water  used  in  drilling  this 
well,  and  this  will  be  charged  to  your  Well  Expense. 
And  if  fuel  oil  is  used,  be  sure  and  state  in  your  journal 
entry  the  number  of  gallons,  or  barrels  used,  and  the 
price  per  gallon  or  barrel.  Outside  of  the  contract  pries 
per  foot  for  drilling  this  well,  this  is  likely  to  be  all  of 
the  expense  you  will  have  on  a  contracted  well.  All 
casing,  casing  shoes,  tubing,  succor  rods,  and  working 
barrel  which  are  left  in  the  well  when  same  is  com- 
pleted and  on  the  pump,  if  not  a  flowing  well,  will  be 
charged  to  Well  No.  1  Investment  Account.  Give  a  de- 
tailed account  of  every  foot  of  casing,  tubing,  succor 
rods,  and  other  material  left  in  the  well,  giving  mate- 
rial, size,  weight  and  price  per  foot. 

If  this  well  is  to  be  a  test  well  and  you  use  your 
own  rig  to  drill  it  you  will  likely  use  a  standard  rig. 
However,  if  you  are  drilling  in  a  proven  field  you  will 
likely  use  a  rotary  rig.  In  either  event  before  drilling 
IS  started  be  sure  and  see  that  notices  are  posted  on 
and  around  you  rig  the  kind  of  Compensation  Insur- 
ance your  company  carries  to  protect  your  employees 
Also  see  that  your  drillers  are  supplied  with  drilling 
report  blanks.  Forms  for  same  will  be  found  in  the 
back  of  this  book  under  the  heading  of  FORMS.  This 
report  will  not  alone  furnish  you  an  excellent  log  of 
your  well,  but  it  will  enable  you  to  pick  out  a  drilling 
crew  from  the  men  employed  on  this  well,  as  this  report 
wil  give  you  the  history  of  each  crew  on  the  well,  and 
will  show  you  who  is  doing  the  work. 

•11  ¥  y°","^^  y»"r  own  rig  in  drilling  this  well,  you 
will  have  all  of  the  expense  above  mentioned,  less  the 
contract  price  per  foot  for  drilling  same.  But  to  make 
up  for  this  you  will  have  all  of  the  labor  expense,  lubri- 
cating oil  for  the  engine  and  gears,  aJso  the  expense  of 
lighting  the  derrick,  if  a  double  shift  is  used,  and  a 
number  of  incidental  expenses,  including  packing  and 
waste  for  the  engine,  batteries  for  the  flash-lights  and 
other  incidentals  which  will  be  turned  in  by  your  Lease 
Foreman  m  charge  of  the  job,  and  this  will  show  on 
purchase  requisition  attached  to  the  invoices  and  ex- 
pense bills  turned  in  on  this  well.  In  addition  to  this. 
If  an  automobile  or  truck  or  both  are  used  on  this  well 
all  expense  charged  against  them  while  on  this  job  will 
be  charged  to  this  well.  In  fact,  all  of  the  money  ex- 
pended on  this  well  except  for  casing,  tubing,  rods  and 
all  of  the  material  left  in  well,  also  the  flow  lines  pipe 
lines  and  tanks,  are  chargeable  to  well  expense.     ' 

Be  sure  and  caution  your  purchasing  agent  to  be 
.caretul  toNpIace  on  his  purchase  requisition  just  what 


account  or  expense  every  item  is  chargeable  to,  as  he  is 
the  only  person  who  can  give  you  this  valuable  infor- 
mation. 

In  the  back  of  this  book  under  heading  of  FORMS 
you  will  find  a  time,  or  labor  slip,  which  should  be  made 
up  in  books  of  fifty  or  a  hundred  sheets  to  the  book, 
and  turned  over  to  your  foreman  or  timekeeper.  All 
labor  charges  should  be  turned  in  on  these  slips,  also 
any  deductions  should  be  shown  on  same.  The  infor- 
mation from  these  slips  should  be  transferred  to  your 
Payroll  Sheet.  You  will  find  a  form  for  same  in  the 
back  of  this  book  under  heading  of  FORMS.  You  will 
find  the  Payroll  Sheet  very  useful,  for  besides  giving 
you  the  information  you  will  need  to  make  out  your  pay 
checks,  it  will  furnish  you  with  the  information  neces- 
sary to  make  out  your  Employers  Compensation  Insur- 
ance Report.  And  from  it  you  can  get  the  information 
which  is  required  by  the  Government  in  regard  to  a  re- 
port on  all  employees  who  receive  as  much  as  $1,000.00 
per  year  for  services  rendered  your  company. 

Each  well  should  have  a  separate  folder  in  your 
files.  In  this  folder  should  be  kept  all  matters  pertain- 
ing to  this  well,  including  all  Expense  and  Investment 
items,  also  a  copy  of  the  log  of  this  well.  And  in  a  sepa- 
rate folder  placed  in  front  of  the  folder  of  the  well  bear- 
ing the  same  number  you  should  file  all  production 
statements  received  from  the  company  who  purchases 
the  oil  produced  from  same.  It  is  very  important  that 
you  keep  these  papers,  as  they  will  be  needed  when  an 
audit  of  your  books  is  made,  and  most  purchasing  com- 
panies refuse  to  furnish  duplicates  of  these  statements 
at  the  end  of  the  year,  as  they  have  been  imposed  on 
so  much  in  this  respect  by  the  carelessness  of  the 
people  who  have  charge  of  this  matter.  And  then  it 
would  require  them  to  put  on  additional  clerical  force 
in  order  to  furnish  these  duplicates  at  this,  the  rush 
season  of  the  year. 

In  making  your  journal  entry  from  invoices  and 
statements  from  supply  houses  and  others,  it  isjiot  ab- 
solutely necessary  for  you  to  itemize  them,  as  in  doing 
this  a  lot  of  time  is  used.  But  unless  my  system  is  car- 
ried out  in  detail  you  will  find  that  you  will  have  saved 
a  lot  of  time  in  the  end  by  making  an  itemized  journal 
entry  of  them.  My  system  is  to  charge  Well  No.  1  Ex- 
pense $75.00  and  credit  the  Continental  Supply  Com- 
pany $75.00,  with  the  following  journal  explanation: 
As  per  invoice  No.  672,  which  may  be  found  in  the  fol- 
der in  your  file  which  contains  Well  No.  1  Investment. 
However,  if  you  wish  to  keep  all  of  your  supply  invoices 
from  each  company  in  a  separate  folder,  you  can  do 
this  by  requesting  your  supply  house  to  furnish  you 
with  duplicate  invoices  covering  each  invoice,  and  in 
this  way  you  can  keep  the  originals  together  in  a  sepa- 
rate folder,  and  the  copies  may  be  used  to  carry  out  my 
system.  Either  way  you  see  fit  to  use  them,  be  sure 
and  mention  the  invoice  number  in  your  journal  entry. 

In  case  you  should  have  a  fishing  job  on  a  drilling 
well,  all  fishing  tools  which  may  be  rented  on  this  work 
should  be  charged  to  your  Well  Expense.  If  tools 
should  be  lost  in  the  hole,  and  the  hole  is  junked  or 
abandoned,  all  of  said  tools,  also  all  casing  in  same 
which  cannot  be  recovered,  may  be  charged  off  as  a 
loss  at  the  close  of  your  year's  business. 

When  a  well  comes  in  a  producer,  either  flowing  or 
after  it  is  put  on  the  pump,  your  Drilling  Well  Expense 
Account  is  closed.  By  adding  the  total  Drilling  Ex- 
pense to  your  total  Investment  Account  on  this  well. 


—11— 


you  will  have  the  total  cost  of  this  well.  You  should 
then  open  an  Operating  Expense  Account  on  this  well, 
to  take  care  of  the  expense  of  pumping,  including 
pumper,  gasoline,  lubricating  oil,  waste  and  other  inci- 
dentals turned  in  by  your  lease  foreman,  also  the  labor 
necessary  to  pull  the  rods  and  tubing  and  the  cleaning 
of  same.  In  addition  to  your  Well  Expense,  you  will 
have  a  Lease  Expense  to  take  care  of  the  labor,  teams, 
or  trucks  used  in  keeping  your  lease  clean,  as  every  pre- 
caution should  be  taken  to  keep  down  fire  hazards. 
Also  charge  other  incidental  lease  expenses  which  may 
be  turned  in  by  your  Lease  Foreman.  Open  a  Lease 
Expense  Account  on  each  producing  lease  you  operate, 
carrying  same  on  your  books  under  the  name  of  the 
land  owner. 

After  your  well  is  putting  oil  in  the  tanks,  have 
your  pumper  or  ganger  to  make  a  daily  gauge  report 
on  each  well,  using  the  form  which  you  will  find  in  the 
back  of  this  book,  which  is  intended  for  this  purpose. 

Also  write  to  the  office  of  the  pipe  line  company 
who  are  running  your  oil  and  request  that  they  send 
you  copies  of  the  tank  strappings  of  all  the  tanks  on 
your  lease  from  which  they  are  running  your  oil.  By 
using  this  strapping  table  you  can  read  the  daily  gauge 
report  sent  in  by  your  lease  men,  and  you  will  know 
exactly  what  amount  of  oil  each  well  is  producing  daily, 
without  waiting  for  your  pipe  line  statement  at  the 
end  of  each  month.  And  by  checking  over  these  tickets 
sent  in  by  the  pipe  line  company  after  each  tank  is  run 
or  gauged,  you  are  in  a  position  to  correct  any  errors 
made  on  same,  as  I  have  found  by  experience  that  these 
people  are  as  liable  to  make  a  mistake  as  anyone. 

WAREHOUSE 

If  you  are  operating  on  a  large  scale  it  will  pay  you 
to  build  a  warehouse  on  a  centrally  located  part  of  your 
holdings,  and  to  stock  same  with  a  complete  line  of  fit- 
ting and  oil  well  equipment.  Also  to  purchase  your 
pipe  and  casing  in  car  lots.  This  casing  and  pipe  can 
be  placed  on  racks,  under  cover,  near  your  warehouse. 
You  will  not  alone  realize  a  big  saving  from  the  differ- 
ence between  buying  in  wholesale  lots  and  in  buying  in 
small  quantities  at  retail,  but  you  will  affect  a  big  sav- 
ing in  time,  and  avoid  possible  shutdowns  on  account  of 
having  to  wait  for  some  needed  repair  parts  or  tools. 

K  you  put  in  a  warehouse  my  advice  is  to  get  an 
experienced  man  for  a  storekeeper,  preferably  one  who 
has  had  similar  experience,  or  one  who  has  had  expe- 
rience in  an  oil  well  supply  store,  as  a  man  of  this  kind 
can  save  you  big  money  by  keeping  your  stock  up  to 
date,  and  he  will  also  understand  how  to  keep  a  stock 
sheet,  and  he  will  also  be  more  familiar  with  the  prices 
on  oil  well  supplies. 

Handle  all  invoices  through  your  office,  and  open 
up  an  account  on  your  books  under  heading,  Warehouse 
Account,  to  take  care  of  same.  As  soon  as  your  store- 
keeper checks  in  a  shipment  of  supplies,  have  him  mail 
you  in  a  duplicate  stock  sheet  covering  this  shipment. 
After  checking  same  with  your  invoice  and  finding 
same  0.  K.,  charge  your  Warehouse  Account  with  the 
amount  of  your  invoice  or  invoices  and  credit  the  sup- 
ply house  from  which  same  were  purchased,  with  the 
same  amount.  Instruct  your  purchasing  agent  or 
agents  to  issue  purchase  requisition  to  your  store- 
keeper the  same  as  if  he  was  buying  from  some  outside 
supply  house,  and  have  your  storekeeper  to  mail  in 


these  rquisitions  the  same  as  if  he  was  running  an  out- 
side supply  house.  Also  have  him  mail  in  a  stock  sheet 
of  goods  on  hand  at  the  end  of  each  month,  and  in  this 
way  you  should  be  able  to  keep  your  Warehouse  Ac- 
count on  your  books  in  balance  with  his  stock  sheet. 
Unless  there  is  a  POSITIVE  rule  made  against  loaning 
things  from  your  warehouse,  there  will  be  more  or  less 
of  it  done,  and  if  lending  is  permitted  1  have  a  loan 
sheet  to  properly  take  care  of  this  matter.  Form  for 
same  will  be  found  in  the  back  of  this  book  under  head- 
ing of  FORMS.  And  unless  a  close  check  is  kept  on 
your  Warehouse  Account,  and  unless  you  have  the  full- 
est co-operation  of  your  storekeeper,  purchasing  agents 
and  field  foreman,  you  will  have  a  hard  time  keeping 
this  account  straight  on  your  books.  And  it  is  a  good 
idea  to  furnish  each  of  these  men  with  a  sheet  of  in- 
structions covering  this  matter,  and  tell  them  just 
what  you  expect  of  them,  and  any  time  they  fall  down 
on  any  part  of  your  instructions  to  them,  let  them 
know  about  it  right  now,  and  if  they  make  a  habit  of 
disregarding  your  instructions  on  this  matter,  report 
them  to  your  executive  officer  and  let  him  handle  this 
matter. 

TAXES 

Another  very  important  matter  in  the  oil  business 
is  that  of  taxes,  and  the  oil  business  is  certainly  blessed 
with  a  lot  of  them.  First,  if  you  are  operating  in  the 
State  of  Texas,  you  will  have  to  pay  the  Secretary  of 
State  a  tax  of  $1.00  per  year  in  advance  to  do  business 
in  this  State.  Then  you  have  city,  county,  state  and 
school  taxes  to  pay,  and  if  you  are  a  stock  company  you 
will  have  a  Capital  Stock  tax  to  pay ;  and  if  at  the  end 
of  the  year  your  business  shows  a  profit,  you  will  have 
a  Federal  Income  Tax  to  pay.  Besides  these  taxes 
most  oil  and  gas  producing  states  levy  either  a  gross 
receipt,  severance,  or  some  such  tax  as  this  on  all  oil 
and  gas  produced;  and  some  states,  including  Texas, 
also  levy  a  tax  regulating  pipe  lines. 

Your  city  tax  will  cover  all  office  furniture  and 
fixtures,  also  any  other  city  property  owned  by  your 
company.  There  will  also  be  a  city  school  tax  on  this 
property.  Your  county,  state  and  school  tax  will  cover 
all  land  owned  in  fee  by  your  company,  also  on  produc- 
ing oil  and  gas  wells,  pipe  lines,  equipment,  drilling 
machinery,  tanks,  live  stock,  vehicles,  automobiles, 
trucks  and  buildings  on  leases,  such  as  warehouse, 
power  house,  tank  houses,  stables,  garages  and  houses 
for  employees. 

The  surest  and  best  way  to  handle  this  matter  to 
avoid  paying  a  penalty  on  same,  or  to  have  your  prop- 
erty assessed  at  twice  or  three  times  its  actual  value  by 
some  equalization  board  which  thinks  that  an  oil  com- 
pany has  all  of  the  money  in  the  world  and  should  be 
made  to  carry  the  biggest  part  of  the  tax  burden  of 
their  county,  is  to  render  this  tax  yourself,  and  the  best 
time  to  do  this  is  immediately  after  you  have  taken  an 
inventory  of  all  of  your  property,  and  this  should  be 
taken  as  near  the  first  of  the  year  as  possible.  As 
nearly  every  county  has  a  different  method  of  fixing 
taxable  value  on  producing  oil  and  gas  wells,  also  equip- 
ment, it  is  a  good  idea  to  write  to  the  tax  assessor  of 
each  county  in  which  you  have  production,  and  have 
them  send  you  a  schedule  covering  this  matter,  and 
showing  his  method  of  arriving  at  the  figures  on  which 
he  bases  this  value.  By  comparing  them  all  you  should 
be  able  to  decide  what  counties  were  trying  to  assess 


—12— 


excessive  values  on  your  properties,  and  then  if  there 
was  enough  difference  to  justify  you,  you  might  go  be- 
fore the  equalization  board  in  that  county  and  try  to 
get  an  adjustment  with  them  on  this  matter,  which 
you  should  not  have  any  trouble  inr  doing  if  you  have 
your  figures  showing  where  other  counties  are  assess- 
ing the  same  class  of  property  on  a  more  reasonable 
basis,  as  a  lot  of  this  practice  is  due  to  ignorance.  Most 
of  them  figure  values  on  producing  oil  and  gas  wells  at 
so  much  a  barrel  on  your  daily  production,  or  about  the 
same  method  that  is  used  in  buying  producing  wells. 

If  you  have  producing  wells  in  the  State  of  Texas 
you  are  subject  to  a  gross  receipt  tax  of  IV2  %  on  all  oil 
produced  by  your  company;  also  1/20  of  1%  tax  regu- 
lating pipe  lines.  This  tax  is  payable  quarterly.  Checks 
covering  this  tax  should  be  made  payable  io  the  State 
Comptroller.  Personal  checks,  unless  certified,  will  not 
be  accepted  in  payment  of  this  tax. 

Louisiana  has  a  severance  tax  of  2  %  on  all  oil  and 
gas  produced  in  that  state.  As  different  states  have 
different  taxes  regulating  this  matter,  and  as  they  are 
all  subject  to  a  change,  I  will  not  try  to  cover  them  in 
this  book. 

REPAIRS  AND  REPLACEMENTS 

This  is  one  of  the  most  important  matters  in  my 
System,  and  if  properly  handled  it  will  save  any  produc- 
ing company  hundreds  of  dollars  in  the  course  of  a 
year.  It  is  here  that  your  purchase  requisition  is  most 
valuable,  for  without  the  purchase  requisition  there 
will  be  no  necessity  of  opening  this  account  on  your 
books  ,as  there  is  no  possible  way  of  your  accounting 
department  obtaining  the  information  which  makes 
this  account  so  valuable  to  your  business,  than  through 
the  information  obtained  from  your  purchase  requisi- 
tion, for  without  this  information  many  thousands  of 
dollars  will  be  charged  to  your  investment  accounts, 
which  could  properly  have  been  charged  to  Expense,  if 
your  accounting  department  was  furnished  with  the 
necessary  information. 

The  value  of  this  information  should  be  taught  to 
all  of  your  purchasing  agents,  field  foreman  and  ware- 
house keeper.  They  should  be  furnished  with  a  sched- 
ule covering  all  of  the  accounts  on  which  repairs  and 
replacements  are  allowed,  and  they  should  be  instruct- 
ed that  any  article  purchased  for  the  purpose  of  repair- 
ing, or  to  be  used  as  a  replacement  on  any  of  the  fol- 
lowing accounts,  should  be  marked  as  such  on  their 
purchase  requisition  at  the  time  these  articles  are  pur- 
chased. They  should  be  especially  cautioned  to  watch 
their  step  when  purchasing  cable,  both  rope  and  wire, 
also  belting,  as  these  articles  are  short  lived,  and  con- 
sequently have  to  be  replaced  frequently. 

The  Government  will  allow  any  legitimate  repairs 
and  replacements  on  any  of  the  following  accounts, 
either  any  parts  of  same,  or  the  whole,  when  such  re- 
placements cover  the  loss  or  breakage  of  small  tools, 
equipment  and  fittings,  to  be  charged  off  of  your  books 
as  a  loss  at  the  end  of  the  year.  Same  may  be  deducted 
from  your  gross  income  on  your  Income  Tax  Return, 
but  the  income  tax,  or  internal  revenue  inspectors  and 
collectors  are  not  required  to  take  your  word  on  this 
matter,  and  unless  you  have  sufficient  proof  to  support 
this  claim,  he  may  not  allow  any  part  of  it  to  be  charged 
off,  and  you  will  be  compelled  to  lose  the  benefit  of  this 
allowance  from  your  Income  Tax.     Even  the  smaller 


producing  companies  will  find  that  this  will  amount  to 
several  thousands  of  dollars  in  the  course  of  a  year, 
and  the  larger  companies  will  benefit  in  proportion. 
But  with  your  signed  purchase  requisition  as  proof 
positive  of  your  claim,  you  would  not  hesitate  to  make 
an  affidavit  as  to  the  correctness  of  this  claim,  and  I 
have  never  known  any  claim  of  this  kind,  when  sup- 
ported by  purchase  requisition,  to  be  turned  down. 

The  proper  way  to  show  this  matter  on  your  books 
will  be  to  open  a  Repair  and  Replacement  Account  in 
connection  with  each  of  the  following  accounts  on  your 
books.  Or  you  could  open  a  Repair  and  Replacement 
Account  to  cover  this  matter  as  a  whole.  And  your 
detailed  journal  entry  on  the  different  items  would  give 
you  the  information  as  to  what  accounts  these  differ- 
ent entries  had  been  made  to.  But  if  you  handle  as 
first  suggested,  make  this  Repair  and  Replacement  en- 
tirely separate  from  any  expense  you  ordinarily  carry 
on  your  books  with  these  accounts.  Each  individual 
well  should  have  a  Repair  and  Replacement  Account  to 
take  care  of  all  necessary  repairs  and  replacements  on 
them. 

Automobiles 

Boilers 

Buildings 

Drilling  Machines 

Engines 

Equipment 

Furniture  and  Fixtures 

Pumps 

Pipe  Lines 

Tools 

Tanks 

Trucks 

Vehicles 

Wells 

FILING 

No  system,  according  to  my  idea,  is  better  than  a 
poor  one,  and  especially  so  when  applied  to  a  Filing 
System,  and  the  more  simple  your  system,  the  less 
trouble  you  will  have  in  locating  the  things  which  you 
need. 

File  all  of  your  subjects  alphabetically,  and  when 
you  have  enough  correspondence  with  an  individual  or 
company  to  justify  you  to  do  so,  it  is  much  better  to 
file  this  correspondence  in  an  individual  folder. 

Each  individual  well  should  save  a  separate  folder, 
regardless  of  the  amount  of  matter  placed  in  same. 
Also  each  producing  well  should  have  a  separate  folder 
in  which  to  place  production  statements  when  they  are 
received  from  the  pipe  line,  or  other  companies  who 
purchase  your  oil  or  gas.  This  production  folder  should 
be  placed  immediately  in  front  of  the  folder  containing 
the  correspondence  of  the  well  of  the  same  number  as 
that  which  contains  the  production  statement  you  are 
filing.  This  same  rule  applies  to  producing  royalties 
and  production  statements  pertaining  to  same. 

In  connection  with  matters  to  be  filed  in  your  well 
arid  royalty  folders,  will  state  that  all  matters  pertain- 
ing to  this  well,  or  royalty,  including  all  correspond- 
ence, all  invoices  and  statements  pertaining  either  to 
Investment  or  Expense  items,  also  a  log  of  the  well; 
and  by  all  means  be  sure  and  include  a  complete  state- 
ment of  the  cost  of  each  well,  including  the  total 
amount  of  investment  left  in  the  well  and  the  expense 
attached  to  drilling  same,  so  that  when  your  executive 
officer  calls  for  the  folder  containing  any  particular 


—13— 


well,  you  will  know  when  you  hand  it  to  him  that  you 
are  giving  him  a  complete  record  of  this  well,  and  that 
you  have  given  him  all  you  have  in  connection  with 
this  matter,  and  he  in  turn  will  soon  learn  that  it  will 
be  of  no  use  to  question  you  further  on  this  matter. 

If  you  will  use  a  Yawman  &  Erbe  Folder  No. 
D-3404-T  you  will  have  a  nice  division  which  will  sepa- 
rate your  correspondence  from  your  invoices  and  state- 
ments, and  thereby  make  it  much  easier  to  locate  the 
subject  matter  needed. 

Where  individual  or  company  correspondence  is 
placed  in  a  separate  folder,  in  addition  to  filing  alpha- 
betically, be  sure  and  put  a  separate  marker  tab  with 
the  name  of  the  individual  or  company  on  same. 

In  filing  correspondence,  file  same  in  the  order  of 
date  received.  In  other  words,  start  the  year  by  filing 
all  January  letters  in  the  front  of  the  file  according  to 
the  date,  and  the  rest  of  the  months  of  the  year  should 
follow  your  January  correspondence  in  proper  order. 
In  filing  outgoing  con-espondence  be  sure  to  attach  a 
carbon  copy  of  each  letter  to  the  one  you  are  answer- 
ing, and  file  same  in  proper  order  as  to  the  date  it  was 
received,  or  sent.  In  filing  matter  alphabetically,  but 
not  in  a  separate  folder,  be  sure  and  keep  it  together 
in  regard  to  the  individual  or  company  from  whom  it  is 
received  or  to  whom  it  is  sent.  File  a  carbon  copy  of 
your  answer  to  each  letter  received,  also  attach  them 
to  each  other  and  keep  them  in  order  as  to  dates. 
Where  you  have  several  letters  of  this  kind  but  not 
enough  to  justify  using  a  separate  folder,  you  may  put 
them  in  your  miscellaneous  folder  and  keep  them  to- 
gether by  using  a  clip. 

File  all  valuable  papers  such  as  Notes,  Stocks, 
Bonds,  and  Contracts  in  a  locked  compartment  of  your 
safe.  It  is  a  good  idea  to  buy  a  safe  large  enough  to 
hold  all  of  your  correspondence,  invoices,  leases  and  all 
papers  of  any  value,  if  your  office  is  not  located  in  a 
modern  fireproof  building,  as  otherwise  you  are  simply 
trusting  to  chance,  as  up  to  date  I  have  never  seen  a 
filing  case,  either  steel  or  other  kind,  which  was  abso- 
lutely fireproof,  although  you  will  frequently  hear  a 
salesman  for  the  different  makes  of  filing  equipment 
claim  that  his  line  is  absolutely  fireproof.  While  not 
claimed  to  be  absolutely  fireproof,  Yawman  &  Erbe 
Company  FIRE  WALL  STEEL  filing  cabinets  will  give 
you  more  fire  protection  than  any  filing:  cabinet  on  the 
market  today. 

At  the  beginning  of  a  new  year  purchase  Y  &  E 
steel  transfer  cases  and  file  your  last  year's  contents 
from  your  regular  filing  case,  in  the  same  order  you 
had  them  in  your  current  files,  as  by  this  method  last 
year's  papers  are  always  easily  accessible. 

The  chapter  on  Filing  in  my  System  is  intended 
for  those  who  have  already  installed  their  filing  equip- 
ment, but  who  have  not  had  experience  in  filing  mat- 
ters pertaining  to  the  oil  business.  But  for  the  be- 
ginner who  is  buying  new  equipment,  I  advise  that  he 
get  all  of  the  available  information  in  regard  to  his 
business,  and  place  same  before  his  Yawman  &  Erbe 
dealer  at  the  time  of  making  his  purchase,  and  I  feel 
sure  that  he  will  be  able  to  install  you  a  system  to  meet 
the  requirements  of  your  particular  business,  which  I 
cannot  do  in  this  System.  As  I  told  you  before  that 
each  individual  business  has  problems  all  its  own,  and 
as  Yawman  &  Erbe  dealers  are  equipped  with  a  system 
to  fit  any  kind  of  a  business,  and  with  information  sup- 


plied by  you,  they  are  in  a  position  to  supply  your 
needs  more  intelligently  than  I  am,  not  knowing  any- 
thing about  your  business,  only  in  a  general  way.  This 
service  is  gratis,  and  I  have  always  found  Yawman  & 
Erbe  representatives  courteous  and  willing  to  be  of  as- 
sistance. He  will  also  be  in  a  better  position  to  show 
the  fire  resisting  and  burglar  proof  qualities  of  their 
line  of  safes. 

LEASE  RENTAL  PAYMENT 

As  most  lease  rentals  are  payable  through  some 
bank,  I  have  designed  a  triplicate  bank  deposit  slip  to 
take  care  of  this  important  matter.  Forms  for  same 
will  be  found  in  the  back  of  this  book  under  heading  of 
FORMS. 

Each  slip  is  of  a  different  color,  in  order  to  avoid 
any  possibility  of  a  mistake  in  handling  them.  The 
original  slip  is  white;  the  duplicate  sUp  is  pink,  and  the 
triplicate  slip  is  yellow.  The  depost  slips  should  be 
made  in  pads  containing  the  number  of  sets  you  desire. 

When  making  out  these  slips  a  carbon  should  be 
used  between  the  original  and  duplicate  slips,  also  one 
between  the  duplicate  and  the  triplicate  slips.  These 
three  slips  should  be  filled  out  properly,  and  it  will  be 
a  good  idea  when  possible  to  make  a  brief  description 
of  this  lease  in  the  space  below  the  line  containing  the 
county,  on  your  deposit  slip.  This  description  should 
always  be  given  in  your  letter,  as  the  party  from  whom 
you  are  leasing  this  land  may  have  two  or  more  tracts 
of  the  same  size  in  the  same  section  of  land,  and  this 
might  confuse  him  if  you  do  not  send  in  a  full  descrip- 
tion of  the  tract  on  which  you  are  paying  this  rental. 

The  three  slips  should  be  enclosed  in  the  envelope 
containing  the  letter  and  the  check  which  you  send  in 
to  the  bank  covei'ing  this  lease  rental.  This  letter 
should  be  sent  by  registered  mail,  with  a  return  receipt 
requested.  The  first  or  original  slip  will  be  retained  by 
the  bank  as  their  record.  The  second  or  duplicate  slip 
will  be  sent  by  the  bank  to  the  party  from  whom  you 
are  leasing,  as  evidence  that  you  have  sent  this  lease 
money  to  be  deposited  to  their  credit  in  the  bank  desig- 
nated by  them  in  the  terms  of  their  lease  to  you.  The 
third  or  triplicate  slip  will  be  signed  by  some  officer  of 
the  bank,  and  returned  to  you.  This  will  be  your  re- 
ceipt that  the  money  was  I'eceived  by  the  bank,  and  you 
should  file  this  slip  in  your  lease  folder  which  contains 
the  lease  on  which  you  paid  this  rental.  A  letter  to  be 
sent  with  these  deposit  slips  and  check  to  the  bank,  will 
be  found  in  the  back  of  this  book. 

CHECKS 

Another  very  important  matter  is  the  proper  han- 
dling of  your  checks.  All  of  your  checks  should  be 
numbered,  and  a  complete  record  of  each  check  should 
be  kept  from  the  time  it  is  issued  until  it  is  returned  to 
you  cancelled  by  your  bank,  and  filed  away  in  a  safe 
place.  A  check  is  so  important  that  it  should  have 
every  protection  that  you  can  give  it. 

Before  a  check  leaves  your  office  it  should  be  run 
through  a  check  protector,  preferably  one  which  pro- 
tects both  the  amount  of  the  check  and  the  payee's 
name.  It  is  also  a  good  idea  to  have  your  checks 
printed  on  a  protected  bond  paper.  The  Todd  Protecto- 
graph  when  used  in  connection  with  their  Protod- 
Greenbac  Forgery-Proof  Check,  will  give  you  all  of  the 
protection  which  I  recommend,  and  will  also  give  you 
an  insurance  policy  for  $10,000.00,  insuring  you  and 


—14— 


your  bank,  jointly,  against  loss  or  law  suit. 

If  an  error  is  made  on  a  check  when  it  is  issued,  do 
not  try  to  erase.  Void  this  check  but  do  not  destroy  it. 
Issue  another  check  in  its  place,  and  handle  the  check 
which  you  voided  in  the  same  manner  you  handle  all 
other  checks.  That  is,  it  should  be  run  through  your 
journal,  so  as  to  keep  your  check  record  complete.  The 
only  journal  record  necessary  is  to  show  that  this 
check  was  voided. 

If  a  check  is  lost  in  the  mail  or  otherwise,  payment 
of  same  should  be  stopped  at  the  bank  at  the  earliest 
possible  moment,  and  a  duplicate  check  should  be  is- 
sued to  cover  same.  The  proper  method  to  use  in  stop- 
ping payment  of  same  at  your  bank  is  to  write  your 
bank  a  letter  along  the  following  lines : 

First  National  Bank, 

City. 

Gentlemen : 

We  herewith  request  that  you  kindly  stop  pay- 
ment on  our  check  No.  2522.  This  check  is  made  pay- 
able to  John  Smith,  and  was  issued  under  date  of  Janu- 
ary 25th,  1922.  The  amount  of  same  is  twenty-five 
($25.00)  dollars.  This  check  was  presumably  lost  in 
the  mail,  and  we  are  issuing  our  check  No.  3002  to  take 
the  place  of  same. 

Respectfully  yours. 


In  making  journal  explanation  when  issuing  a  new 
check  to  cover  the  one  which  was  lost,  be  sure  and 
explain  that  this  check  is  issued  to  take  the  place  of 
check  No.  2522,  which  was  lost,  and  if  you  use  a 
voucher  check,  write  on  the  voucher  part  of  same,  the 
same  explanation. 

After  you  receive  your  cancelled  checks  from  the 
bank  at  the  first  of  each  month,  they  should  be  care- 
fully checked  with  the  bank  statement  for  any  possible 
errors.  After  same  are  checked  and  found  0.  K.  ar- 
range them  in  numerical  order  and  check  them  with 
your  check  stubs,  vouchers,  and  journal  entries,  in 
order  to  see  what  checks  are  outstanding.  These  out- 
standing checks  should  be  entered  in  your  reconcile- 
ment book.  A  reconcilement  book  is  the  best  method 
I  have  ever  found  to  handle  this  matter  properly,  and 
same  can  be  purchased  at  most  stationery  supply 
houses,  or  may  be  purchased  from  Hargreaves  Print- 
ing Company,  2201  Main  Street,  Dallas,  Texas.  When 
sending  in  an  order  to  this  company  call  for  Reconcile- 
ment Ledger  No.  504. 

This  book  will  give  you  a  complete  record  of  your 
outstanding  checks,  and  will  keep  this  record  all  to- 
gether. All  checks  should  be  kept  in  numerical  order 
and  filed  away  in  a  safe  place,  preferably  your  safe. 
If  you  use  a  voucher  check,  the  concelled  check  and  the 
corresponding  voucher  should  be  filed  together.  If  a 
supposedly  lost  check  is  ever  returned  to  you  file  it 
away  in  its  proper  place.  Your  check  book  and  book 
of  vouchers  should  always  be  kept  in  a  safe  place,  and 
away  from  the  public,  as  there  are  still  a  lot  of  forgers 
in  this  country,  and  it  does  not  pay  t  otake  any  chances 
with  your  bank  account. 

CLOSING  YOUR  BOOKS 

At  the  end  of  the  year  when  you  close  your  books 
preparatory  to  starting  a  new  year's  business,  remem- 
ber that  all  transactions  pertaining  to  your  Capital 
Account  will  be  found  under  heading  of  Surplus  Ac- 


count. This  account  will  show  either  a  loss  or  gain 
and  should  be  charged  off  to  Loss  and  Gain  accord- 
ingly. 

All  of  your  expense  accounts  will  be  charged  off 
to  Loss  on  your  Loss  and  Gain  Account.  Be  sure  and 
remember  that  in  making  out  your  Income  Tax  Return, 
to  deduct  your  Income  Tax  from  this  amount,  as  it  is 
not  allowable. 

All  income  shown  on  your  books,  except  that 
which  was  received  from  the  sale  of  Capital  Assets, 
will  be  charged  off  to  Gain  on  your  Loss  and  Gain  ac- 
count. In  other  words  all  expense  accounts  will  be 
charged  on  the  debit  side  of  your  Loss  and  Gain  Ac- 
count, and  all  Income  shown  on  your  books  will  appear 
as  a  credit  on  your  Loss  and  Gain  Account. 

On  all  other  accounts  after  same  have  been  totaled, 
balanced  and  properly  ruled,  the  remaining  balance 
should  be  clearly  shown  below  the  ruling  and  on  the 
proper  side  of  the  page,  or  if  transferred  to  a  new 
sheet,  it  should  be  shown  under  its  proper  heading  and 
on  the  proper  side  of  the  sheet. 

All  accounts  which  have  been  closed  out,  or  have 
been  transferred,  should  be  removed  from  your  current 
ledger,  and  should  be  placed  in  a  transfer  binder  in  the 
same  order  that  you  carried  them  in  your  current 
ledger;  and  then  they  should  be  filed  away  some  place 
where  they  can  easily  be  reached  in  case  they  have  to 
be  used  for  reference. 

AUDITS 

Unless  your  organization  has  an  Audit  depart- 
ment the  service  of  a  reliable  Auditor  should  be 
secured,  preferably  one  who  has  had  experience  in 
auditing  the  books  oil  companies,  as  it  is  necessary  that 
an  audit  should  be  made  at  the  close  of  the  year, 
especially  if  yours  is  a  Stock  Company,  and  unless  this 
auditor  has  had  some  experience  in  auditing  oil  ac- 
counts, his  report  will  not  show  the  standing  of  your 
company  as  clearly  as  if  he  had  this  experience,  and  he 
is  not  as  liable  to  find  possible  errors  on  your  books. 
As  I  have  said  before,  the  oil  business  is  a  business  in 
itself,  and  it  requires  special  study  to  master  it. 

INCOME  TAX  REPORT 

The  same  rule  that  applies  to  your  auditor  will 
apply  to  the  person  who  makes  out  your  Income  Tax 
Return,  and  unless  that  person  has  had  experience  in 
making  out  the  Income  Tax  Return  for  oil  companies, 
and  unless  he  had  made  a  special  study  concerning 
Depreciation  &  Depletion,  especially  the  Depletion  on 
oil  wells,  you  are  likely  to  lose  a  lot  of  money,  for  to 
figure  the  proper  Depletion  on  oil  wells  requires  a  lot 
of  study,  as  it  covers  so  many  angles.  Allowance  is 
also  made  for  discovery  wells. 

The  only  man  in  the  United  States  whom  I  can 
honestly  and  truthfully  recommend  as  an  Oil  Auditor 
and  Income  Tax  Expert  is  G.  S.  Reid  of  G.  S.  Reid  «&; 
Company,  Suite  204  Mason  Building,  Houston,  Texas. 
When  he  makes  out  your  Income  Tax  Return  and 
sends  it  in,  you  may  rest  assured  that  the  matter  is 
closed  for  all  time  to  come,  and  that  there  will  be  no 
come  back,  also  that  he  had  saved  you  every  dollar 
which  could  be  legitimately  saved  on  same. 

He  is  so  good  that  he  has  been  called  to  all  parts  of 
the  United  States,  by  some  of  the  largest  companies 
in  the  oil  business. 


—15— 


OTHER  LOSSES  WHICH  ARE  ALLOWED 

All  property  which  is  lost,  or  stolen,  if  not  recov- 
ered, also  all  damage  by  wind,  water  and  fire,  unless 
the  property  is  insured,  may  be  charged  off  as  a  loss 
on  your  Income  Tax  Return. 

INFORMATION  FOR  YOUR  EXECUTIVE  OFFICER 

The  following  pages  contain  information  which 
should  be  placed  in  the  hands  of  your  executive  officer, 
at  the  earliest  possible  date  after  your  books  are  closed 
at  the  end  of  the  month. 

As  your  balance  sheet,  with  detailed  information 
will  put  him  in  touch  with  the  general  condition  of  the 
business,  including  the  financial  status,  which  is  usual- 
ly the  most  important  item,  this  information  followed 
by  a  list  of  your  Accounts  Payable  (subject  to  a  dis- 
count) and  your  Accounts  Payable  (current)  will  give 
him  an  opportunity  to  pass  on  these  different  matters, 
and  to  decide  if  he  will  take  the  discounts  on  all  of  the 
accounts  subject  to  same.  To  an  oil  man  who  is  in  the 
habit  of  thinking  in  large  figures,  a  mere  2  per  cent 
looks  like  very  small  change,  but  when  you  stop  to 
think  that  this  is  2  per  cent  a  month  and  that  means 
24  per  cent  a  year,  and  that  you  can  go  to  the  bank 
and  borrow  at  from  8  to  10  per  cent  per  year,  the  mat- 
ter begins  to  take  a  different  aspect,  as  14  and  16  per 
cent  earned  on  your  discount  account  is  not  a  matter 
to  be  turned  down  without  some  consideration. 

Current  accounts  payable  should  also  be  passed  for 
payment  as  soon  as  possible,  as  prompt  payment  of 
your  bills  makes  your  credit  stronger,  and  a  strong 
credit  in  the  oil  business  is  a  great  asset. 

The  proper  way  to  place  these  matters  before  your 
executive  officer,  is  to  purchase  an  I.  P.  Loose  Leaf 
Duraflex  Binder  No.  2714,  put  out  by  the  Irving-Pitt 
Manufacturing  Company,  Kansas  City,  Mo.,  and  sold 
by  most  stationery  supply  and  book  stores.  By  this 
method  you  have  both  a  handy  and  permanent  record. 
Fill  this  binder  with  the  desired  number  of  I.  P.  Loose 
Leaf  pages,  sizes  8V2XII  inches.  These  pages  are  put 
out  by  the  same  people  who  put  out  the  above  men- 
tioned binder. 

In  this  book  each  producing  oil  and  gas  well,  also 
each  producing  royalty  should  have  a  separate  page. 
Put  a  tab  on  the  page  containing  each  account,  and  on 
this  tab  place  the  name  of  the  well  and  royalty  from 
which  this  production  is  received.  If  you  have  more 
than  one  producing  well  on  each  lease  place  the  well 
number  with  the  name  on  the  tab. 

Each  time  a  check  is  received  for  production,  the 
sheet  in  the  book  covering  this  production  should  be 
removed  and  the  amount  of  production  and  the  price 
paid  for  same  should  be  added  to  that  which  is  all 
ready  there  in  the  same  manner  as  shown  on  the  sheet 
which  I  have  placed  in  this  book  for  your  guidance. 
By  doing  this  from  month  to  month  it  gives  your  execu- 
tive officer  a  chance  to  make  a  comparison  with  the 
preceeding  months,  and  if  the  production  is  falling  off, 
it  gives  him  a  chance  to  take  this  matter  up  with  your 
field  or  production  foreman  with  a  view  to  increasing 
same. 

All  gas  and  casinghead  gas  production  should  be 
handled  in  the  same  way,  and  this  information  should 
be  kept  in  this  ■book  and  placed  on  your  executive  of- 
ficer's desk  as  soon  as  possible  after  same  has  been 
received  in  the  office. 


In  addition  to  the  information  shown  on  the  fol- 
lowing pages  and  which  should  be  placed  in  this  book, 
put  a  tab  near  the  back  of  this  book  on  which  should 
be  marked  Well  Logs.  Under  this  heading  keep  a  copy 
of  each  Well  Log  in  your  possession,  and  that  should 
include  a  log  of  each  well  which  you  own  any  interest 
in. 

Your  balance  sheets  should  be  filed  in  this  book 
monthly,  under  a  tab  marked  Balance  Sheets.  If  you 
are  a  stock  company  a  copy  of  the  minutes  of  your 
company  should  be  kept  in  this  book  also.  With  the 
information  contained  in  this  book,  your  executive  of- 
ficer will  be  kept  in  close  touch  with  all  matters  per- 
taining to  the  business  at  all  times. 

If  a  lease  is  sold  or  dropped  it  should  be  shown 
on  your  detailed  balance  shoot  on  the  same  page  and 
under  the  same  heading  as  this  lease  was  shown  on 
your  balance  sheet  under  heading  of  Surplus  Account 
as  an  explanation  of  the  difference  between  the  total 
of  your  previous  month's  report  and  this  one. 

BALANCE  SHEET  AS  OF  JULY  31ST,  1922 

ASSETS: 

Cash   in   Banks $  8,000.00 

Furniture  &   Fixtures 838.14 

Accounts   Receivable   9,970.07 

Notes  Receivable  3,984.96 

Stocks  &   Bonds  in  other 

Companies  11,101.00 

Royalties  Active  5,438.34 

Wells    (Oil)    25,280.41 

Wells  (Gas)  3,043.20 

Askew  No.  1  Investment..  2,250.00 

Bell-Williams    Investment  2,730.24 

Leases    Inactive    2,250.00 

Leases  Inactive,  La.  W.  C.  2,300.00 

Leases  Inactive,  Tex.  W.C.  8,573.00 

Royalties   Inactive   1,721.25 

Fee    Holdings    2,901.00     $90,381.61 

LIABILITIES: 

Account   Payable    $3,756.50 

EXPENSES: 

General   Expenses   12,468.52 

INCOME: 

January  1st  to  August  July 

Baker  Royalty  to  6-31  $    130.57  904.44 

Jones   Royalty   to  4-31  119.91  119.91 

Jones   Royalty   to  7-15  169.70  942.31 

Willis  Royalty  to  7-15  203.90  1,348.85 

Parker    No.    1   to  7-15  382.48  3,771.82 

Parker    No.    3   to  7-15  1,470.48  3,345.52 

Boon  No.  1         to  7-15  278.00  2,501.51 

Fitz   No.   1          to  6-31  234.14  1,246.42 

Interest  and  Discount 129.42     $14,320.20 

CAPITAL  STOCK: 

Class  "A"  Stock,  8,483  shares 

@  $10.00  Par  Value 84,830.00 

Surplus  46.57 


$102,896.70  $102,896.70 


—16— 


DETAILS  OF  BALANCE  SHEET  ITEMS  AS  OF 
JULY  3IST,  1922 

EXHIBIT  "A" 

CURRENT  ASSETS 
Cash  in  Banks: 

Farmers  &  Mechanics  National..-. $     7,000.00 

First   National    (Reserve) 1,000.00     $     8,000.00 


Av«.wunts  Receivable: 

R.  C.  Dale  (For  Casing 158.46 

Bessmer  Oil  Corp.  (For  Tanks) 461.00 

L.  L.  Duke  (Part  Lease  Rental) 10.00 

Askew    No.    1    Syndicate,    Equipment 

for  Well  No.  1 257.96 

Silbert  R.  Willis  (Casing  &  Tools 9,057.65 

Lucky  Strike  Oil  Company,  July  Of- 
fice  Rent 25.00 


Notes  Receivable: 

(Other  Than  Stock) 

R.  L.  Thompson,  Monthly  purchase  of 
Buick  Roadster  837.64 

Rio    Grand   Valley    Syndicate    (Loan) 

Due  November  22nd,   1922 821.3? 

Ray  F.  Tolbert  (Loan),  Due  Septem- 
ber 16th,  1922 856.00 


(For  Stock 

D.  P.  King   (100  shares  of  Class  A. 

Stock  @  $10.00,  due  Oct.  5th,  1922       1,000.00 

Ervin  Walker  (47  shares  of  Class  "A" 

Stock  @  $10.00,  due  Jan.  1,  1923)....         470.00 
Furniture  &  Fixtures: 

Ft.  Worth  Office  $959.60  less  deprecia- 
tion reserved  thereon,  $95.96,  and 
purchase  of  filing  cases  in  June, 
$17.00,  less  sale  of  Wall  Map  to 
J.  P.  Rice  for  $7.50,  and  sale  of  of- 
fice desk  to  Wortham  Loan  Com- 
pany,  $35.00   , 

Stock  &  Bonds  in  Other  Companies: 

Lucky  Strike  Oil  Company,  4,764 
shares  @  $50.00  per  share,  valued 
at  $9,526.00   9,526.00 

Rio    Grande   Valley    Syndicate.     Cost 

$5,375,  valued   at   1,575.00 


Carried   Forward   

"INVESTMENTS" 


9,970.07 


2,514.96 


1,470.00 


838.14 


11,101.00 
$33,894.17 


$33,894.17 


Carried    Forward    

Royalties  Active: 

Baker  Royalty,  undivided  1-16  in  120 

Acres,  Eastland  County  $     1,193.88 

Jones  Royalty,  undivided  1-2  in  50 
Acres,  Stephens  County  2,385.54 

Willis  Royalty,  undivided  1-4  in  142 
Acres,  Comanche  County  1,858.92     $     5,438.34 


Active  Oil  &  Gas  Wells: 

Parker  Well  No.  1  (Oil)  1-8  of  8-8 
production    8,260.87 

Parker  Well  No.  2  (Oil)  1-8  of  7-8 
working  interest  3,210.24 

Parker  Well  No.  3  (Oil)  1-8  of  7-8 
working  interest  9,446.64 


Parker  Well  No.   4   (Oil)    1-8  of  8-8 

production   3,207.21 

Boon  Well  No.  1  (Oil)  1-16  production       1,155.45 
Fitz  Well  No.  1   (Gas)   7-32  interest, 
Clairborne    Parish,    La 3,043.20 


Inactive  Royalties: 

Long,  undivided  3-284  in  460  acres,  Co- 
manche County 10.00 

Jenkins,  undivided   1-2   in   100   acres, 

Eastland   County   1,000.00 

Bishop,    undivided    1-8    in    60    acres, 

Stephens   County 200.00 

Mills,  undivided  1-16  in  200  acres,  Palo 
Pinto  County  10.00 

Wier,   undivided   24-256   in   40   acres, 

Eastland   County    -501.25 

(Overriding  Interest) 


Inactive  Leases  (Semi  Proven): 

Radford  Lease,  De   Sota  Parish,  La. 

20  acres   1,000.00 

R.  S.  Moss  Lease,  Clay  County,  Texas, 

10   acres   200.00 

C.    B.    Coke    Lease,,  Archer    County, 

Texas,   30   acres 400.00 

A.    D.    Levy    Lease,    Young    County, 

Texas,  150  acres 650.00 


Inactive  Leases  (Louisiana  Wildcat): 
Lease    No.    12,    Union    Parish,    La., 

180   acres   800.00 

Lease   No.   45,   Caldwell   Parish,   La., 

40  acres   300.00 

Lease   No.   62,   Caldwell   Parish,   La., 

60   acres   400.00 

Lease  No.  112,  Claiborne  Parish,  La., 

140   acres   800.00 


Carried   Forward   

Brought  Forward  $  73,927.37 

Askew  No.  1  Investment: 

1-8  Working  Interest  in    (Clairborne 

Parish,  La.)  in  80-acre  Lease 2,250.00 

Bell-Williams  (Royalty  Investment): 
1-16  Royalty  Interest  in  45,640  acres 

in  Reves  County,  Texas 2,730.24 

Texas  Leases  Inactive  (Wildcats) : 
100  McCuUough  Co.,  acres  80  $  400.00 

102  Menard  Co.,  180  acres...      800.00 

103  Eastland  Co.,  20  acres. ...      150.00 

104  Kaufman  Co.,  60  acres....      116.00 

105  Terrell  Co.,  30  acres 158.00 

106  Bexar   Co.,   18   acres 300.00 

107  Comanche  Co.,  50  acres...      300.00 

108  Clay  Co.,  40  acres 290.00 

109  Archer   Co.,   110   acres...      550.00 

110  Wilbarger  Co.,  200  ac's  800.00 
116  Wichita  Co.,  15  acres...  1,600.00 
118  Wichita   Co.,   10   acres...  1,200.00 

120  Reeves   Co.,   160   acres...      600.00 

121  Reeves  Co.,  240  acres 700.00 

122  Reeves  Co.,  300  acres 435.00 

128  Haskell  Co.,  160  acres  ...      174.00      8,573.00 
Fee  Holdings  (Texas): 

Durdan  Fee,  Comanche  Co., 
80  acres 1,200.00 


28,323.61 


1,721.25 


2,250.00 


2,300.00 

$73,927.37 


— XT-- 


Hofman  Fee,  Clay  County, 

1-16  interest  in  15  acres  ...      100.00 

Block  49,  Eastland,  East- 
land County,  Texas,  Lots 
--    Nos.  18  to  36 1,601.00       2,901.00 

EXHIBIT  "B" 

LIABILITIES 
Accounts  Payable: 

Continental   Supply   Co.    (For  Equip- 
ment)  $2,377.50 

Johnson  Supply  Company  (For  Tools...  1,379.00 


$     3,756.50 


EXHIBIT  "C" 

EXPENSES 
General : 

Parker  Well  No.  1 $    475.20 

Boon  Well  No.  1 962.83 

Fitz  Well   No.   1 245.07 

Lease  &  Royalty  Expense 35.00 

Lease   Rents    518.65 

Legal  &  Audit  Expense 1,666.28 

Office  Supplies  &  Expense....      579.80 

Office  Rent  220.00 

Salaries  4,827.75 

Taxes 1,474.20 

Telephone  &  Telegraph  457.37 

Travel    Expense    1,006.37 


12,468.52 


Carried    Forward    $102,850.13         $3,756.50 


EXHIBIT  "D" 

INCOME 

Brought    Forward    $102,850.13 

Received  from  Jan.  1st  to  August — 
Royalties: 

Baker  Roy.  (Oil)  to  7-31-22  $  904.44 
Jones  Roy.  (Gas)  to  5-31-22  119.91 
Jones  Roy.  (Oil)  to  7-15-22  169.70 
Willis  Roy.   (Oil)   to  7-15-22        203.90 


$3,756.50 


Wells— Oil: 

Parker  Well  No.  1  to  7-15-22  3,771.82 

Parker  Well  No.  3  to  7-15-22  3,345.52 

Boon  Well  No.   1  to  7-15-22  2,501.51 


Wells— Gas: 

Fitz  Well  No. 


1   to   6-31-22     1,246.42 


Interest  &  Discount: 

Interest   on    Notes    and    Dis- 
counts on  Paid  Bills 

CAPITAL  STOCK 
Class  A  Stock — Authorized: 

Unissued,      24,000  shares,  $240,000.00 
.Issued,  15,517  shares,     155,170.00 


3,315.51 

9,618.85 
1,246.42 

129.42 

84;830.00 


8,483  shares 

SURPLUS 

This  account  set  up  to  show  Loss  and 

Gain     on     Capital     Accounts     until 

books  are  closed  at  the  end  of  the 

year,   1922   46.57 


Expense  Difference 

$    130.57 

169.70 

203.90 


OPERATING  PROFIT  AND  LOSS  STATEMENT 
FOR  MONTH  OF  PULY,  1922 

Income: 

Royalties —  Income 

Baker    $    130.57 

Jones    169.70 

Willis 203.90 

Wells— Oil- 
Parker   Well  No.  1 382.40 

Parker   Well  No.  3 1,470.48 

Boon       Well  No.  1 278.00 

Wells— Gas— 

Fitts       Well  No.  1 234.14 

Interest  and  Discount — 
2%   Discount  on   Continental 

Supply   Company's   Invoice 

No.  1252  for  $400.00 8.00 


$  36.96 


73.12 


345.52 
345.52 
204.83 

234.14 


8.00 


$2,877.27         $110.08         $2,767.19 


Expenses: 

Legal  and  Audit $    200.00 

Office  Supplies  and  Expense 2.25 

Office   Rent  35.00 

Salaries  825.00 

Taxes  1,066.12 

Telephone  and  Telegraph 30.03 

Travel  Expense  62.50 


Gain.. 


$2,220.93 


$    546.29 


ACCOUNTS  PAYABLE  (Subject  to  a  Discount) 

Name  of  Last 

Company.              Invoice  No.     Date           Am't  Dis.     dis.  date 

Continental  Sup.  Co 48     Jan.    1     $    160.00  $    3.20     Feb.  20 

Continental  Sup.  Co. ...  956     Jan.  12            80.00  1.60     Feb.  20 

Continental  Sup.  Co 1356     Jan.  15            40.00  .80     Feb.  20 

Continental  Sup.  Co 2896     Jan.  27          640.00  12.80     Feb.  20 

Continental  Sup.  Co 2940     Jan.  30          320.00  6.40     Feb.  2D 

Total  due  Continental  Sup.  Co $2,240.00  $24.80  Total  dis. 


Johnson   Supply   Co....     24     Jan.    9 
Johnson   Supply   Co 36     Jan.  11 


40.00 
60.00 


.80     Feb.    9 
1.23     Feb.  11 


Total  due  Johnson   Supply   Co....$    100.00     $  2.00  Total  dis. 


ACCOUNTS  PAYABLE  (Current) 

First  National  Bank,  January  office  rent 

City  Garage,  January  account,  storage  and  gasoline 

Mills  Heavy  Hardware  Company;  January  account,  small 


tools 


Ford  Auto  Supply  Company,  January  account,  Ford  parts 
Western  Oil  Company,  January  account,  gasoline  and  oil 
Willard  Battery  Station,  January  account,  rent  on  battery 
Southwestern    Telephone    Company,    December    contract, 

January  toll   

Western  Union  Telegraph  Company,  January  account 

Excelsior  Tire  Company,  January  account,  tire  and  tube 

Grant's  Supply  Store,  January  account,  office  supplie.s 

Blair  Printing  Company,  January  account,  stationery 

Lone  Star  Tool  Company,  January  account,  fishing  tools.. 


$150.00 
4.75 

15.75 

25.65 

36.00 

2.50 

25  00 

9.65 

23.00 

6.4  S 

25.00 

125.50 


$102,896.70     $102,896.70 


Total  of  January  account $449.25 


—18— 


LEASE  RENTALS  PAYABLE  FOR  QUARTER 
ENDING  MARCH  31ST,  1922 

Lease  Owner's  Rental 

Number    County         State     Name  Acres    Date         Rental 

100     McCullough,   Texas    J.  B.  Wade        80    Jan.    6      $20.00 
This  lease  expires  Jan.  6,  1924.    Lease  rental  payable  quarterly. 

102    Menard  Texas     R.  S.  Davis      180    Jan.  15        45.00 

This  lease  expires  Jan.  15,  1926.   Lease  rental  payable  quarterly. 

10.3     Eastland  Texas     F.  P.  Jones        20     Jan.  24  5.00 

This  lease  expires  Jan.  24,  1927.   Lease  rental  payable  quarterly. 

106     Bexar  Texas     D.  V.  Quinn      18    Feb.    4         9.00 

This  lease  expires  Feb.   4,   1928.     Lease  rental  payable   semi- 
annually. 

108     Clay  Texas     L.  O.  Johnson   40    Feb.  20       20.00 

This  lease  expires  Feb.  20,  1929.     Lease  rental  payable  semi- 
annually. 

128     Haskell  Texas     T.  0.  Bailey     160    Mar.  24     160.00 

This  lease  expires  March  24,  1923.  Lease  rental  payable  annually. 
This  lease  is  protected  by  a  drilling  well.    Inquire  as  to  status 
of  this  well  before  paying  lease  rental. 

HOPKINS  WELL  NO.  1— PRODUCTION  REPORT 
PRAIRIE  OIL  &  GAS  COMPANY 

Total 

January,  1922:                 Barrels     Bbls.  Price  Amount     Total 

1-  1-22  to   1-15-31 206.73  $2.25  $465.14 

1-15-22  to  1-31-22 190.03  2.25  427.57 

Total  January  396.76  $892.71 

2-  1-22  to  2-15-22 206.34  2.25       464.27 

2-15-22  to  2-28-22 211.56  2.25       476.01 

Total  February 417.90  940.28 

3-  1-22  to  3-15-22 192.46  2.25       433.04 

3-15-22  to  3-31-22 160.62  2.25       361.40 

Total   March :....     353.08  794.44 

4-  1-22  to  4-15-22 19.65  2.25         44.21 

Total  April  (see  explanation  in  Journal.. 44.21 

Total  August  140.43  210.65 

5-  1-22  to  5-15-22 81.53  2.25       183.44 

5-15-22  to  5-31-22 104.76  2.25       235.71 

Total   May 186.28  419.15 

6-  1-22  to  6-15-22 65.23  2.25       146.77 

6-15-22  to  6-30-22 66.31  2.25       149.20 

Total  June  131.54  295.97 

7-  1-22  to   7-15-22 65.14  2.26       146.57 

7-  1-22  to  7-15-22 47.72  2.00         95.44 

7-15-22  to  7-31-22 71.77  1.75       125.60 

Total   July    184.63  367.60 

8-  1-22  to  8-15-22 72.02  1.50       108.03 

8-15-22  to  8-31-22 68.41  1.50       102.62 

PHILLIPS  WELL  NO.  5— CASINGHEAD  GAS 

PRODUCTION 

INDIAN  GASOLINE  CORPORATION 

January,  1922:  Division       Gallons  Price  Total 

1-1-22  to  1-31-22 8/64  of    664.16  0.1707  $13.78 

2-1-22  to  2-28-22 8/64  of  3057.98  0.1707  65.25 

3-1-22  to  3-31-22 8/64  of  2609.47  0.1616  52.71 

DAVIS  WELL  NO.  3— GAS  PRODUCTION 
THE  TEXAS  COMPANY 

January,  1922:  Division  M.  Cu.  Ft.  Our  Part  Price     Total 

111-22   to    1-31-22..         %  27,669,000  6,917.250     .03  $207.52 

2-1-22   to    2-28-22..         %  24,636.000  6,159.000     .03       184.78 

3-1-22   to    3-31-22..         14  30,860.000  7,715.000     .03       231.45 


Copy  of  letter  to  be  mailed  to  the  bank  accompa- 
nied by  check  for  Lease  Rental: 

City  National  Bank, 
Graham,  Texas. 
Gentlemen : 

We  herewith  enclose  our  check  No.  66  for  $60.00, 
which  we  ask  that  you  kindly  place  to  the  credit  of  Mr. 
Sam  Burgess. 

This  money  is  intended  as  an  annual  lease  rental 
payment  on  our  lease  No.  72,  which  contains  60  acres 
of  land  which  we  have  leased  from  Mr.  Burgess,  same 
being  the  west  one-half,  and  the  south  one-half  of  the 
east  one-half  of  the  southwest  one-fourth  of  block  No. 
1562,  H.  I.  G.  N.  Survey  in  Young  County,  Texas,  and 
owned  by  Sam  Burgess.  The  rental  on  same  being  due 
January  1st,  1922. 

Please  mail  to  Mr.  Burgess  the  duplicate  deposit 
slip  enclosed,  using  the  enclosed  stamped  envelope 
which  we  are  sending  for  that  purpose.  Also  please 
sign  and  return  to  us  in  the  enclosed  stamped  and  self- 
addressed  envelope,  the  triplicate  deposit  slip,  which 
will  be  our  receipt  that  this  lease  rental  has  been  re- 
ceived by  your  bank. 

Respectfully  yours, 
THE  SMITH  OIL  COMPANY. 

If  Lease  Rental  is  to  be  sent  direct  to  the  land 
owner,  use  the  following  letter: 

Mr.  Sam  Burgess, 
Olney,  Texas. 
Dear  Sir: 

We  herewith  enclose  our  check  No.  66  for  $60.00. 
This  money  is  intended  to  cover  the  annual  lease  rental 
payment  on  our  lease  No.  72,  which  contains  60  acres 
of  land  which  we  have  leased  from  you,  same  being  the 
west  one-half,  and  the  south  one-half  of  the  east  one- 
half  of  the  southwest  one-fourth  of  block  No.  1562,  H. 
I.  G.  N.  Survey  in  Young  County,  Texas.  This  lease 
rental  is  due  January  1st,  1922. 

We  ask  that  you  kindly  sign  in  the  presence  of  a 
witness,  and  then  have  the  witness  sign  the  enclosed 
rental  receipt,  and  return  same  to  us  in  the  enclosed 
stamped  and  self-addressed  envelope. 
Respectfully  yours, 

THE  SMITH  OIL  COMPANY. 

RENTAL  RECEIPT 

Lease  No............:..:.:.:.    Check  No 

Payable  to 

Received  of  SMITH  OIL  COMPANY  $ 

being  in  full  for  the rental  on 

acres  of  land  in ...county,  

from to... in  accordance  with 

the  terms  of  an  Oil  and  Gas  Lease  covering 


Said  Lease  being  from to 

dated ,...:...... and    containing.., acres. 


Witnessed : 


—19^ 


EMPLOYEES'  SCHEDULE 

Each  and  every  employee  who  has  been. with  your 
organization  a  sufficient  length  of  time  to  become 
thoroughly  familiar  with  his  or  her  duties,  should  be 
required  to  write  out  in  detail  a  schedule  covering  their 
individual  duties. 

This  schedule  will  prove  of  great  value  in  case  of 
sickness,  absence  on  vacations,  or  when  someone  leaves 
your  employ  oh  short  notice. 

These  schedules  should  be  turned  over  to  the  dif- 
ferent department  managers,  and  same  should  be  filed, 
by  them,  in  a  place  which  is  convenient  for  anyone  in 
this  department  to  reach,  so  that  in  case  the  depart- 
ment manager  is  absent,  that  these  schedules  can  read- 
ily be  found,  and  thus  prevent  any  unnecessary  delays 
in  your  office  routine. 

By  reading  over  these  schedules  when  not  other- 
wise employed  a  new  employee  will  soon  become  famil- 
iar with  the  work  required  of  them,  and  in  case  of 
doubt  it  will  prove  a  handy  reference. 

DAILY  BANK  BALANCE 

After  your  bank  deposits  are  made  each  morning 
you  should  take  a  balance  of  your  cash  on  hand  in  each 
bank,  if  you  use  more  than  one  bank,  and  a  schedule 
should  be  made  and  placed  in  some  stated  place,  on  or 
in  your  executive  officer's  desk.  This  will  be  of  great 
assistance  to  him  in  many  ways,  and  especially  so  if 
your  balance  on  hand  is  small. 

This  balance  may  be  found  by  taking  the  totals  of 
the  money  you  have  deposited  in  the  bank,  and  sub- 
tracting from  same  the  total  amount  of  the  checks  you 
have  issued  against  same.  By  keeping  up  with  this 
daily  you  will  find  it  very  easy  to  keep  this  matter 
straight. 

DEPOSIT  SLIP  RECORD 

This  seems  a  very  small  matter  to  most  account- 
ants. But  I  think  it  is  one  of  first  importance,  and  un- 
less it  is  properly  kept,  it  is  liable  to  cause  the  loss  of 
much  time,  and  in  the  case  of  an  audit  when  you  are 
paying  an  auditor  at  the  rate  of  $25.00  per  day  for  his 
services,  the  loss  of  one  deposit  slip,  or  insufficient  ex- 
planation on  same  may  cost  you  quite  a  few  dollars. 

A  full  explanation  of  each  individual  deposit  should 
be  made  on  your  duplicate  deposit  slip,  which  is  the 
one  that  you  keep  for  your  records,  and  remember  that 
you  cannot  get  too  much  detail  on  same.  For  it  is 
awfully  hard  for  anyone  to  remember  transactions 
which  have  happened  twelve  months  previous,  and  in 
case  of  doubt,  or  in  case  it  was  necessary  to  refer  to 
this  matter,  that  detail  would  look  awfully  good  to  you. 

Each  deposit  slip  should  be  numbered,  also  the 
duplicates,  and  after  your  journal  entry  has  been  prop- 
erly made,  these  duplicate  deposit  slips  should  be  filed 
away  in  a  safe  place,  where  they  will  be  handy  for 
reference. , 

TRADE  MAGAZINES 

At  least  one  good  oil  trade  magazine  like  the 
PETROLEUM  AGE  is  a  necessity. in  every  oil  office, 
for  with  this  magazine  the  executive  can  keep  up  with 
all  of  the  latest  developments  in  the  different  oil  fields 
in  the  world,  and  will  ofttimes  find  information  which 
will  help  him  solve  some  of  his  own  individual  prob- 
lems in  his  own  field  and  his  own  wells. 


This  magazine  and  one  other,  The  Oil  Weekly, 
practically  cover  all  of  the  information  in  the  oil  fields 
of  the  world  like  a  blanket,  and  a  man  who  is  really  in- 
terested in  the  oil  business  and  wants  to  keep  in  touch 
with  same  cannot  afford  to  be  without  these  two  maga- 
zines. The  first  mentioned  is  published  by  the  Graf fis- 
Sutton  Publishing  Company,  28  East  Jackson  Blvd., 
Chicago,  111.,  and  the  latter  is  published  by  The  Gulf 
Publishing  Company,  Houston,  Texas. 

AUTOMOBILE  EXPENSE 

I  have  left  this  matter  until  toward  the  last,  as  I 
wish  to  call  your  special  attention  to  this  account,  for 
if  this  matter  was  watched  more  closely,  it  would  not 
amount  to  so  much.  I  have  kept  a  separate  account  on 
each  automobile  owned  by  my  company,  and  I  have 
known  of  old  scrap  cars  which  should  have  been  sold 
as  junk  being  kept  in  repair  for  a  year  at  a  cost  greatly 
exceeding  the  price  of  a  new  car,  and  at  the  end  of  the 
year  it  was  sold  for  a  price  less  than  junk,  bringing  less 
than  $50.00.  Experience  has  taught  me  to  trade  my 
old  cars  in  on  new  cars  before  they  have  lost  too  much 
of  their  trade  value,  and  by  playing  this  system  you 
will  find  that  you  are  money  ahead  at  the  end  of  the 
year,  as  your  cars  will  be  in  use  most  of  the  time,  and 
not  in  the  repair  shop.  Your  repair  and  gas  bills  will 
be  much  lighter,  and  you  will  have  an  automobile  at 
the  end  of  the  year  and  not  a  pile  of  junk.  Someone  in 
the  office  should  be  appointed  to  take  care  of  the  pur- 
chase of  new  automobile  license  tags  each  year,  as  one 
or  two  fines  imposed  on  you  for  neglecting  this  matter 
will  more  than  pay  the  tax  on  several  cars,  and  what 
is  everybody's  business  is  nobody's  business.  The  easy 
method  is  to  let  George  do  it. 

Charge  each  individual  car  with  its  own  expense, 
which  is  very  easily  done  if  this  information  is  placed 
on  the  purchase  requisition  at  the  time  each  article  is 
purchased.  All  expense  such  as  gasoline,  oil.  storage, 
flashlights  and  battery  rent  should  be  charged  to  Auto- 
mobile Expense;  and  an  Automobile  Repair  and  Re- 
placement Account  should  be  opened  to  take  care  of  all 
repair  and  replacement  items,  such  as  tires,  tubes, 
flashlight  batteries,  burned  out  or  broken  electric 
bulbs,  and  any  and  all  repairs  to  engine,  fan,  belt,  body, 
top,  and  wheels,  or  any  parts  of  same. 

PURCHASING  DEPARTMENT 

If  your  organization  is  large  enough  to  require  a 
regular  Purchasing  Department,  it  will  require  the 
service  of  an  experienced  executive  for  same,  for  this  is 
one  of  the  most  important  departments  in  the  oil  busi- 
ness, and  unless  the  head  of  this  department  has  had 
considerable  experience  in  buying  for  oil  companies  he 
is  likely  to  cost  you  a  lot  of  money  while  he  is  getting 
this  experience,  and  if  he  has  this  experience  he  has 
probably  worked  out  a  system  of  his  own  which  will 
perhaps  suit  him  better  than  any  I  might  suggest. 

The  object  of  this  chapter  in  my  books  is  to  sug- 
gest to  the  inexperienced  in  the  oil  business  things 
which  I  have  found  added  to  the  efficiency  of  the  dif- 
ferent departments  in  which  they  are  used,  and  I  can 
truthfully  say  that  any  article  I  suggest  or  recommend 
is  the  best  of  its  kind  on  the  market  today,  as  proved 
by  test  of  actual  experience  in  the  oil  business  in  com- 
petition with  similar  articles  put  out  by  other  com- 
panies. 


-20, 


FURNITURE  AND  FIXTURES 

The  furnishing  of  one's  office  is  more  or  less  a 
matter  of  individual  taste,  and  the  only  suggestions  I 
will  make  are  for  those  who  have  not  had  any  expe- 
rience in  this  line.  In  the  matter  of  desks  I  think  you 
will  find  the  flat  top  types  the  most  suitable  for  a  mod- 
ern office,  as  the  pigeonholes  in  a  roll  top  desk  are 
merely  catch-alls  and  the  matters  usually  placed  in 
same  could  be  much  better  and  more  properly  be  taken 
care  of  in  your  regular  filing  system.  Or  if  you  want 
a  handy  filing  system  to  take  care  of  your  individual 
needs,  I  think  you  will  find  a  system  to  meet  your  re- 
quirements in  either  a  Yawman  &  Erbe  or  Byron  Desk 
Company's  line  of  efficiency  desks.  These  people  also 
put  out  an  efficiency  typewriter  desk. 

In  my  chapter  on  Filing  I  recummend  the  Yawman 
&  Erbe  line  of  filing  equipment  and  systems,  but  I  for- 
got to  mention  that  this  company  has  a  very  nice  steel 
filing  section  to  take  care  of  maps,  and  as  most  oil  com- 
panies have  quite  a  few  valuable  maps  on  hand,  it  will 
be  worth  your  while  to  investigate  this  matter. 

A  tape  recording  adding  machine  is  a  necessity  in 
any  oil  office,  no  matter  how  small,  and  it  will  pay  for 
itself  many  times  over  in  the  avoidance  of  errors  and 
the  satisfaction  in  knowing  you  are  right.  You  will 
find  either  a  Victor  or  Burroughs  will  meet  all  of  the 
requirements  for  this  purpose.  But  if  your  organiza- 
tion is  large  enough  to  justify  the  use  of  a  calculating 
machine,  by  all  means  investigate  the  merits  of  Mon- 
roe Calculator.  This  machine  is  as  near  human  as  it  is 
possible  to  make  a  machine,  as  by  the  simple  pressure 
of  a  plus,  minus,  or  division  key  you  have  the  total  of 
any  set  of  figures  you  may  have  on  this  machine. 

All  standard  makes  of  typewriters  have  their  mer- 
its and  you  will  find  stenographers  who  will  claim  that 
the  machine  which  they  first  learned  to  operate  is  the 
best.  But  I  believe  that  if  you  will  investigate  the 
merits  of  a  NOISELESS  typewriter  you  can  readily  see 
the  value  of  same,  especially  if  a  number  of  typewrit- 
ers are  in  constant  use  in  the  same  office  with  your  ac- 
counting department,  as  such  constant  noise  affects 
the  nerves,  and  is  likely  to  cause  errors.  A  Line-a-Time 
attachment  fitted  on  any  typewriter  will  increase  the 
efficiency  of  the  operator  of  same  at  least  twenty-five 
per  cent,  besides  relieving  the  physical  strain  on  the 
operator. 

STATIONERY  AND  PRINTING 

In  the  matter  of  purchasing  stationery,  you  will 
find  that  you  can  save  considerable  money  by  buying 
same  in  quantities,  as  the  largest  matter  of  expense  In 
connection  with  same  to  the  printer,  is  the  setting  up 
of  the  forms.  For  your  benefit  I  have  made  arrange- 
ments with  my  publisher  to  set  up  all  of  the  forms 
which  you  will  find  in  this  System,  and  by  this  ar- 
rangement you  will  be  able  to  make  quite  a  saving  on 
the  printing  of  same,  without  being  compelled  to  buy 
in  lots  of  a  thousand  or  more  in  order  to  do  so.  Of 
course,  the  larger  quantity  you  order  the  larger  will 
be  your  saving  on  same.    Each  form  is  numbered,  and 


when  ordering  same,  kindly  use  this  number.  The 
name  of  the  company  from  whom  you  may  order  these 
forms  is  THE  BOYD-PATTERSON  COMPANY, 
1323-25  Wood  Street,  Dallas,  Texas. 

DRILLING  EQUIPMENT  AND  OIL  WELL 
SUPPLIES 

You  can  effect  quite  a  saving  in  the  development 
of  your  leases  by  using  steel  derricks  and  equipment, 
and  especially  so  if  you  are  developing  on  a  large  scale, 
for  besides  eliminating  the  danger  of  fire  and  most  of 
the  danger  from  wind,  this  type  of  derrick  is  easily 
taken  down,  moved  and  reset  on  a  new  location.  And 
they  are  to  be  considered  as  permanent  equipment. 
When  in  the  market  for  this  line  of  equipment  you  can 
make  no  mistake  in  purchasing  the  line  of  derricks  and 
equipment  manufactured  and  distributed  by  The  In- 
ternational Derrick  &  Equipment  Company  of  186 
Broad  Street,  Columbus,  Ohio.  You  will  find  this  line 
fully  represented  in  any  oil  field  which  is  being  devel- 
oped by  experienced  oil  operators. 

When  in  the  market  for  tongs,  casing,  elevators, 
tubing  elevators,  sucker  rod  elevators,  floor  circle 
braces  and  tubing  catchers,  the  experienced  oil  oper- 
ator naturally  thinks  of  the  Dunn  Line.  These  six  re- 
liable tools  are  the  best  of  their  kind  on  the  market  to- 
day and  you  will  find  one  or  all  of  them  in  use  on  nearly 
every  drilling  rig  in  operation  today.  This  splendid  line 
is  manufactured  by  the  Dunn  Manufacturing  Company 
of  Oxnard,  California,  and  can  be  purchased  through 
any  reliable  oil  well  supply  house.  Safety,  efficiency 
and  durability  are  the  outstanding  features  of  this  line 
of  oil  well  tools. 

Your  needs  for  a  reliable  meter  may  be  filled  by 
purchasing  the  line  of  meters  put  out  by  the  Metric 
Metal  Works  of  the  American  Meter  Company,  Tenth 
and  Payne  Avenue,  Erie,  Pa.  This  company  manufac- 
tures meters  which  fully  meet  all  of  the  requirements 
of  the  oil  business  and  all  of  its  branches,  and  this  line 
of  meters  has  met  the  requirements  of  this  business 
for  a  period  of  time,  and  is  still  the  best  line  of  meters 
on  the  market  today. 

All  of  your  other  requirements  for  drilling  equip- 
ment and  oil  well  supplies  of  any  nature  and  in  any 
part  of  the  world  where  oil  is  being  developed  will  be 
fully  met  by  The  Continental  Supply  Company.  If  you 
are  looking  for  real  service  you  can  make  no  mistake 
by  intrusting  your  business  to  this  company,  and  you 
will  always  find  them  more  than  willing  to  advance  you 
all  the  credit  you  are  entitled  to,  and  you  will  find  their 
service  unequalled. 

It  is  very  important  that  your  purchasing  depart- 
ment keep  a  complete  record  of  all  outstanding  orders 
and  be  careful  to  check  off  same  on  their  arrival.  Also 
be  sure  to  issue  purchase  requisition  for  every  item  or- 
dered, and  place  the  necessary  information  on  same  so 
that  your  accounting  department  will  be  in  a  position 
to  charge  the  proper  account  with  same.  Follow  this 
rule  to  the  letter,  even  when  ordering  supplies  for  the 
warehouse. 


—21— 


[tiiiiiiiiiiiiiiiiiiriiiiiiiiiiMiiiiiiiiiiiiiiiiiiiHiiiiiiiiiit 


Forms 


lllllllllllllllllltlllllKltllUIIIIMtlllllllllllllllllMllllll) 


Form  No.  7 


Forma.    I3I9-M»-39M 


Lease  No. 

Countg  or  Pariah- 
State 

Lessor 

Acres  Sotd. 

Deaertptton 


LEASE  SALE  CARD 


LEASE   SALE 


Date  of  iMtae... 


Acres  Sold-... 
Description  . 


..7a.., 


Acres  Sotd... 
Description .. 


Consideration.. 
Consideration.. 
Conalderatton... 


Data  of  Payment.  Re&d. 

Date  of  Payment,  Rec'd 

Date  of  Pagment  Retfd 

Size  8x5  inches  (3-ply  Bristol  Board) 


Form  No.  5 

romifi.   ur«eo»-5»9T 

Lease  No Date  of  Lease... 

County  or  Partsfa. Itecord 

State _ 

LKSSORS 


LEASE   CARD 


..Pagft„ 


Date  of  Assignment ^.. 

Record Vol.. 


Pare.. 


Description :... 


Royalty 


Oil r. Terra 

Dry  Gas Rental  

Gasoline  Gas.l .'  Payments  Coumence.. 

REMARKS - 


.years.    Expires.. 


Consideration  9... 


Vou.  No CheckNo 

Size  8x5  inches 


-25— 


Size  6x9  inches 


FOR  WEEK  OF 


DAILY  REMINDER 


Form  No.  8 
FOR  YEAR  OP 


Sunday 

Monday 

Tuesday 

-— -^ .                                                                                                              -; --,- 

1 Dursuay 

Vrl/tmxi 

rrioay 

Saturday 

—26- 


Form  No.  12 


Daily^  Gauge  Report 


Fann- 


24  hoon  ending  8  A.  M  _ 


-19_ 


8iM 
ot 
Tank 

GAUGE 

RUNS 

B.  8.  *  W. 

n 

x« 

Tamk 

8  A.M. 

."^ 

.J?-. 

SMoad 
MManramMit 

off  U 

Ffc 

IB. 

Ft 

In. 

Ft 

Id. 

rt 

In. 

Fl. 

Id. 

Ft. 

tn. 

■^• 

Wells  Pumping 


Hours  Pumped 


Wells  Flowing 


Wells  off  and  why 


Wells  Drilling 


Wells  Cleaning  Out 


Hours  Off 


New  Wells 


WeUs  Shot 


Initial  Production 


Size  of  Shot 


REMARKS: 


Pumper. 


Size  8%xll  inches  (Duplicate^ 


—27- 


Form  No.  6 


Portal.    )M9-1M-«9M 


LEASE  RENTAL  CARD 
RENTAL    CARD 


L€a»€  No. „  DQt9  6f  Leaa* 

Month  Due. Record Vol.. 

Countp  or  Pariah ^tate 

LESSORS: _._ 


.  POffe.. 


Dale  of  Aaaignment .. 
Record 


Aena Meaertptton:.. 


-f-i 


Rental Payments  to... 

Das  of  Month   Due 

Lease   Expires « 

Protective  Clause 

REMARKS: 


Size  8x5  inches  (3-ply  Bristol  Board) 


Form  No.  13 

APPC  Form  16 


ORIGINAL  TO  BE  RETAINED  BY  STOREKEEPER 

LOAN  SLIP  Dci,^ 


_  Warehouse 


Article  listed  below  to  be  returned  to  warehouse  in  same  cendition  as  receired  when  work  is  finialMd. 


Nomber 

DESCRIPTION  OK  ARTICLE 

S.  H 

Old 

AoMunt 

U ted  at 

Received  by 


FOREMAN 


6%x4'4  inches  (Duplicate) 


VTOREKCEPCR 


-9«_ 


Form  No.  4 


Wichita  Falls,  Texas,. 


-19L 


Mr. 


Deliver  to. 


for _^__ 

and  charge  to  account  of 


-Lease 


By- 


the  following  material: 


AMOUNT 

SIZB 

DESCRIPTION 

. 

• 

PURCHASE  REQUISITION 

Size  41^x8%  inches.    Made  with  duplicate.    Duplicate  to  be  of  colored  bond. 


—29— 


Form  No.  9 


SEMI-DAILY  DRILLING  REPORT 


NOTE  l.—Jf  there  are  any  defects  at  any  time  in  machinery  or  drilling  rigs  or  other  equipment,  it  MUST  be 
reported  under  "'remarks"  by  the  drillers  on  their  respective  tours,  and  in  the  absence  of  such  reports  the 
Superintendent  will  assume  that  no  defects  exisv. 
2—.    These  Semi-Daily  Reports  must  be  signed  by  the  drillers  on  their  respective  tours. 

Semi-Daily  Report,  Ending  7. .._m ._i92.. 

Lease 

Well  No Rotary-Star  Drilling  Rig Depth  7_-_M.._. 


Feet  Drilled 

FORMATION 

COLOR 

Depth  Total  Feet 

Amount  Drilled  Last  12  Hours — Feet 

LABOR 

NAME 

OCCUPATION 

HOURS 

- 

Remarks: 


Signed- 


^Driller 


Sizez  5^2x8%  inches  (Duplicate) 


Form  No.  10 


Name- 


Has  labored - 
Has  labored - 

Doe 

Due 


Dm.. 


TIME  OR  LABOR  TICKET 
Occupation 


—  Month- 
DR. 


-days  at  $_ 
-days  at  $ 


for  Board.. 

..lot 

..for 


-per  day,  amountrng  to 
-per  day,  amounting  to 

.  days  It  $..... p«r  day 

Dale 

Date 


TOTAL  DEBIT  CHARGE 

BALANCE  DUE  THIS  MONTH.. 


CR. 


Form  No.  14 


Received  Hiyment- 
Signature _ 

Size  8%x4  inches 


LEASE  RENTAL  DEPOSIT  SLIPS 
Deposited  With 


-»2 


Bank  of 


J91_ 


For  the  credit  of 


Fo 

r  Rental  Due 

on 

acres  land 

in 

County 

ORIGINAL 


By 


DUPLICATE 


Cashier 
Please  forward  this  to  your  customer 
NOTE:    Receipt  by  Bank  of  this  rental  and  crediting  of  same  on  its 
books  in  no  way  involves  bank  in  tliis  transaction. 


By 


TRIPLICATE 


Please  return  this  to 


Cashier 


-31— 


Form  No.  11 


Oil  Producers  and  Refiners 

PAY  ROLL 


AME  OF  EMPLOYEE 


-Days  Ending - 


DISTRIBUTION 


Re  pain  |     Conitniction 


DEDUCTIONS  1 


Size  lOVzxU 


—32- 


BRANCHES 

located  at  all  Prominent 
Oil    Country    Points 


NEW  YORK 
2  Rector  Street 
New  York  City 

PENNSYLVANIA 

Pittsburgh 

WEST  VIRGINIA 

Charleston        Clarksburg 

OHIO 


Columbus 
West  Park 
Newark 


Logan 
Marietta 


ILLINOIS 

Bridgeport 

KANSAS 

Augusta  Eureka 

Chanute  Ottawa 

Coffeyville  Pea  body 

El  Dorado  Virgil 

Elgin  Winfield 

KENTUCKY 

Bowling  Green     Louisa 

ARKANSAS 

£1  Dorado  Smackover 

LOUISIANA 


Shreveport 
Harmon 


Haynesville 
Oil  City 


OKLAHOMA 


Apperson 

Ardmore 

Barnsdall 

Bartlesville 

Blackwell 

Bristow 

Cashing 

Drumright 

Duncan 

Garber 

Healdton 


Henryetta 

Morris 

Oklahoma 

City 
Okemah 
Okmulgee 
Tonkawa 
Tutsa 
Walters 
Wilson 
Wynona 


TEXAS 

Amarillo  Houston 

Breckenridge  Humble 
Burkburnett    Mexia 


Dalla 
Eastland 
Electra 
Fort  Worth 
Graham 


Mirando  City 
Orange 
Ranger 
Wichita  Falls 


Basin 
Casper 


COLORADO 

Denver 

WYOMING 

Lander 
Rawline 


MONTANA 

Great  Falls       Winnett 


Export  Department 

Continental  Well  Supply  Co., 

Inc. 

2  Rector  Street 

NEW  YORK  CITY 

and  c/o  CARR  BROS. 

Finsbury  Court, 

Finsbury  Pavement, 

E.C.  2,  LONDON,  ENGLAND 


We  Consider 

the  Three  Elements 

of  our  Business  PoUcy 


Q 


uality  ^  Service  ^  Price 

Equally  Important 

QUALITY    of    Material, 
SERVICE  in  executing  orders 

and  Service  rendered  by  our  Materials, 

A  FAIR  PRICE 

^ 


We    are    the    Selling    Agents    for    the   Oil    Country  for 

THE  YOUNGSTOWN 
SHEET  &  TUBE  CO. 

Casing,    Drive  Pipe,    Line  Pipe,  Tubing,   Standard 

Pipe. 

Every  step  in  the  making  of  Youngstown  Tubular 

Goods  is  guarded  by  the  rigid  inspection  of  highly 

skilled  workmen  in  the  most  modern  and  complete 

plant  of  its  kind  in  the  world. 

All  sizes  from  1  /8  in.  to  20  in. 

"YOUNGSTOWN  PIPE  IS  GOOD  PIPE'' 


Our  Line  is  Complete — Everything  for  the  Contractor,  Producer  and  Refiner 

The  Continental  Supply  Company 

Oil  and  Gas   Well  Supplies 

ST.  LOUIS,   MO. 


GENERAL  OFFICE 


34\ears  Experience  Enables 

us  io  Meei  your  Meier 

Rec|uii4inenis 


Iron  Case 
Observation 


High  Pressure 


■■• »  T  »i 


Iron  Case 
Domestic 


Tobey — Domestic                   ^^| 

HHHHJHHHI^^^IH 

^                Tin — Domestic 

Orifice  Meter 

, 

Cm          Steam          Water 

Oil 

WESTCOTT  &  GREIS 

Kansas  City,  Mo. 

Tulsa,  Okla. 

Dallas,  Texas 

METRIC  METAL  WORKS,  ERIE.PA 

o/* American    Meter  Company  Inc 


PEED. 

*y  .^r; ;         in 

bPERATION 


r-** 


'lit    i'  ' '?i\i 


1  Sar^t  I 


Safety:  To  materially  reduce  or 
eliminate  the  hazard  to 
life  and  property. 

Speed :  To  speed  up  and  increase 
the  output  of  workmen 
and  equipment. 

Efficiency:  To  lower  the  cost  of  ex- 
isting methods  of  opera- 
tion to  an  appreciable 
extent. 

The  features  which  justify  the  manufac- 
ture and  widespread  use  of  any  appliance 
or  device  for  oil  country  work,  are  Safety, 
Speed  and  Efficiency  in  operation. 

Each  Dunn  Tool  is  subject  to  the  most 
severe  tests  possible  in  order  to  determine 
the  justification  for  its  production  according 
to  the  above  measurement  of  value.  Each 
one  has  proved  up  fully  and  completely  in 
these,  the  most  vital  features  of  any  oil 
well  tool,  before  it  has  been  offered  to  the 
petroleum  industry. 

Carried  in  Stock  by 

Leading  Supply  Houses  Everywhere 

Tongs     Tubinx  Elevators       Casinj^   Elevators 

Sucker-Rod  Elevators  Floor-Circle  Braces 
Tubing  Catchers 

Dunn  Manufacturing  Co. 

Office  and  Works:   Oxnard,  Cal.,  U.  3.  A. 

^     Correspondence         AH        Cable  Address : 
In   All  Standard     "Dunoiltool" 

Languages  Co<Ies      Oxnard.  Calif. 


■i'- 


^\ 


